An individual who has children may wish to establish a testamentary trust, so that in the event that he/she dies, the funds that are left to his/her children are handled responsibly. A testament trust is established to protect a minor or a young adult when he/she inherits extensive quantities of money, which is disbursed following a loved one’s death.
If the appointee dies, the individual that he/she appointed as the trustee obtains the responsibility of handling the funds that are inherited by the minor, until he/she reaches a certain ages. For example, the conditions of a testamentary trust may state that the minor or young adult will gain full rights to this inheritance when he/she reaches the age of 21, or when he/she graduates from college. The conditions vary from on testament to another.
When a trustee is appointed, he/she must ensure that the funds are used responsibly, to care and provide for the child. If a parent or loved one does not appoint a trustee to handle the trust, the court may appoint a trustee. However, an individual should appoint someone that he/she trusts completely, to ensure that the trustee is acting in the best interest of the child.
An individual who is appointed as a trustee will be required to visit the probate court regularly, so that the court can review the trust fund and ensure that the funds are being spent appropriately. If possible, it may be more appropriate for an individual to establish a revocable living will, however, in some instances, a testamentary trust is necessary, such as when a parent possesses a significant life insurance disbursement.