Most people in Alberta expect to write a will at some point in their lives.
However, many are not aware of the various tools at their disposal for transferring assets when creating a will.
A testamentary trust can be an important aspect of your will, helping you transfer assets to a loved one’s tax-effectively and according to your preferences after you pass away.
The testamentary trust experts at Vest Estate Lawyers, serving western Canada, can help you create a will that carries out your wishes in the most effective way possible.
What is a testamentary trust?
Like all trusts, a testamentary trust holds assets on behalf of a beneficiary or a group of beneficiaries and is managed on behalf of these individuals by a trustee.
A testamentary trust is not really a type of trust per se – it is an “umbrella” term that includes many types of personal trusts, usually created as part of a will.
The key point about a testamentary trust is that it only comes into effect after you die – as opposed to a living trust, which transfers assets to a trustee during your lifetime.
In certain circumstances, a court may order the formation of a testamentary trust on behalf of a deceased person’s estate.
Assets designated for a testamentary trust remain your property until you die. In fact, the trust is only set up after you die. At this point, assets are transferred to the trust and distributed to beneficiaries according to the instructions contained in the trust agreement.
Like with your will, the terms of the testamentary trust are decided on and formalized in writing while you are alive and usually with the assistance of a qualified lawyer.
Jonathan Dowhaluk
PARTNER
Jon is a lawyer in the firms Edmonton Office. He passionately provides legal advice and represents clients in all family matters. Jon has a wealth of experience advocating for his clients in judicial, quasi-judicial as well as in dispute resolution venues.
