Peck Ritchey, LLC > Administration of Estates, Trusts, and Guardianships > Testamentary Trust

Chicago Testamentary Trust Lawyers

When you are drafting a will, you may not want the inheritance to go immediately to a spouse or child upon your death. Instead, you may want the property and assets to be managed for the beneficiary’s protection over an extended amount of time. In this instance, a testamentary trust can be established to manage the inheritance for the beneficiary.

A testamentary trust is legally effective only after you pass away, and it doesn’t provide any estate planning protections to you or your family during your lifetime. This type of trust can be a tax effective structure used for the protection of assets that are held within the trust. A testamentary trust is established by your will and only comes into effect after your death.

If you are interested in setting up a testamentary trust, a lawyer can ensure that you do so properly. The Chicago testamentary trust attorneys at Peck Ritchey, LLC have been practicing estate law for over 100 years. To learn more about how we can help you with a testamentary trust, contact us today at (855) 328-5787 to schedule a free consultation.

Why You Need a Lawyer for Testamentary Trusts

While there are advantages to setting up a testamentary trust, it requires the help of an experienced living trust lawyer who can explain the benefits while also adhering to your estate planning wishes. With the help of a skilled attorney, you can understand the pros and cons of establishing a testamentary trust.

When you hire an attorney, you can also avoid making crucial mistakes that may affect you and your family in terms of setting up a testamentary trust. An estate planning lawyer will be able to help you plan your estate while ensuring that your assets and property are well protected for the future.

Why Choose Us?

Peck Ritchey, LLC is one of the most prominent estate planning and estate law firms within the state of Illinois. The firm’s managing partner, Kerry Peck, is president of the Chicago Bar Association and has received numerous awards, including being named as a Super Lawyer for 11 consecutive years.

Partner Timothy Ritchey has chaired the Probate Practice Committee for the Chicago Bar Association as well as testifying as an expert before the Illinois Senate on amendments to the Illinois Probate Act.

The attorneys at our firm have 100 years’ collective experience helping individuals in the Chicago metro area and Illinois. Our past clients have included the State of Illinois, Cook County, and the City of Chicago.

Every attorney at our law firm brings decades of estate planning experience, as well as invaluable knowledge in setting up trusts. Our lawyers ensure that any client who comes to us for estate planning needs receives the best possible assistance so that their wishes for their estate are honored as intended.

The Benefits of Testamentary Trusts

Testamentary trusts provide a better level of control over the distribution of assets. The benefits of testamentary trusts are to protect assets and to reduce any estate taxes that are paid by beneficiaries from income earned from the trust. There are two main types of testamentary trusts:

  • Discretionary Testamentary Trusts: The executor of a will gives a beneficiary the option to receive part or all their inheritance from a testamentary trust. The primary beneficiary will have the power to remove and appoint trustees as well as appoint themselves to manage the inheritance in a discretionary testamentary trust.
  • Protective Testamentary Trusts: When a protective testamentary trust is established, a beneficiary receives their inheritance directly from the trust. The beneficiary does not have the option to appoint or remove trustees. These types of trusts are set up if it is determined that the beneficiary cannot responsibly manage the income from the trust due to their age, having a disability, or an inability to effectively manage money.

There are also tax benefits to testamentary trusts. If a beneficiary takes the income from the trust in their name, they will only pay tax on the income generated from their inheritance at a personal marginal tax rate. There are advantages in receiving an inheritance from a testamentary trust, especially when the beneficiary meets the following criteria:

  • Has a partner that receives a lower income
  • Has a high personal tax rate
  • Has minor children or grandchildren
  • Has children/grandchildren with lower or no taxable income

The main goal for testamentary trust is to ensure that each beneficiary’s inheritance is protected from an ability to mismanage or overspend assets gained by the trust, as well as avoid any claims on the beneficiary’s assets due to the dissolution of a marriage or partnership.

Testamentary Trust FAQs

Many people who are considering a testamentary trust have no experience with them, and thus have many questions. The answers to some common questions we hear at our firm are below.

Why Choose a Testamentary Trust?

A testamentary trust is typically used to leave money to beneficiaries that are minors and are unable to receive it directly. Similar results may be achieved using other types of trusts, but a testamentary trust is the easiest option. When a testamentary trust is set up, the minor heir(s) receives an inheritance, but only when they reach a certain age. Otherwise, the trustee is responsible for managing the funds.

When Does It Make Sense to Have A Testamentary Trust?

If a person’s estate is small in comparison to the potential payout of life insurance or other amounts that will be paid to the estate after their death, a testamentary trust is advisable.

Does the Testamentary Trust Operate Like a Living Trust?

Testamentary trusts have some of the same features as a living trust and operate in a similar manner. The care and maintenance of assets of the trust are overseen by the trustee, with distributions made in accordance with the terms of the trust. However, the trust has specific terms and limitations relating to time.

Does a Testamentary Trust Avoid Probate?

The testamentary trust does not avoid probate. If that is your main motivation for creating a trust, then a testamentary trust will not fit your needs.

Contact a Testamentary Trust Lawyer for Help

Establishing a testamentary trust is a difficult and complicated process. If you need to set up a testamentary trust, Peck Ritchey, LLC can help. Our Chicago estate planning and trust attorneys can advise you about a testamentary trust for you that will meet your needs. Contact us at (855) 328-5787 to discuss your options today.

Testimonials

Attorney Kyle Fahey handled our matter with skill and professionalism, and was always responsive. 10/10, would work with him and the firm again.

–Jon T.

The peace of mind that Peck Ricthey's office has given me is worth every penny. The services they provided me and my family in an emergency medical situation is beyond outstanding. Last minute notice, Peter Brady and team were compassionate, understanding and most importantly efficient and got the job done. Look no further if you have any needs that this office can provide for you. Definitely in good hands! Thank you, a thousand times over for all of your help.

–Christine K.

Very responsive and knowledgeable at handling our brother’s estate. Would definitely recommend!

–Ralph C.

I solicited Peck Ritchey, LLC for assistance with a living trust for which I became the beneficiary. I needed assistance with understanding the details of how it all worked. However, I was especially concerned because there were threats of allegations made by family members and a lawsuit was filed against me. I needed a solid professional who had my best interests in mind. Peter Brady took my case and he managed it flawlessly. He explained everything in a way I could understand, he knew the law inside and out, he was always available to answer questions, and even offer support when things seemed like they could become extremely problematic. In addition to this, he had a plan. He navigated the course as if he already knew the next move by the opposing attorney. He made me feel like everything was in control and that’s because he knew exactly what he was doing and he consulted with me about everything. We ended up settling out of court and ultimately the court officially dismissed the lawsuit. I honestly believe if it wasn’t for Peter and his expertise this could have gone in an entirely different direction. Peter did a stellar job and I couldn’t be more pleased and impressed with his performance.

–John T.

Tim Ritchey is as smart, honest, and genuine as they come. He truly puts helping people above making money. If you have a need, don’t hesitate to hire him.

–Jay T.

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