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How Do You Set Up A Testamentary Trust?

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How Do You Set Up A Testamentary Trust?

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Many parents set up a testamentary trust to ensure their minor children (in the name of their guardians) receive a steady income. Other reasons to set up a testamentary trust include caring for a relative or other person with disabilities. Since the trust is considered its own entity, beneficiaries will not be taxed individually. Instead, the trust itself will be taxed separately from the individual beneficiaries. Consider the value of your total assets to determine if a testamentary trust is warranted. If your assets are owned jointly with your spouse, you might not have enough in sole assets to have enough of a testamentary trust to be beneficial to you and your family. Ask your attorney to execute your will with testamentary trust language included. Since the trust will not come into existence until your death, this is the best place to set up the testamentary trust. Set up a testamentary trust for each of your beneficiaries. This will ensure that when taxes do come due, they will e

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