Support Your Heirs With a Testamentary Trust

September 6, 2017


Your goal may be to leave your loved ones with enough money to live comfortably after you are gone. But a direct gift of your estate may leave such funds accessible to creditors or others, subject to mismanagement or being squandered. That’s why it’s important to provide protection through a trust and direction on how to manage and distribute your assets to your beneficiaries.

Create a testamentary trust

A testamentary trust can be created through your will1 to direct how your estate’s assets will be managed and distributed to your beneficiaries.

Your beneficiaries do not receive a single, lump-sum inheritance through a trust. Instead, your trustee will distribute funds to them in a manner according to the amount and timing you specify in the trust document.

Whatever your family’s unique situation, an experienced Estate and Trust Advisor, which you can find through MD Private Trust in collaboration with your MD Advisor, can help you establish a trust strategy.  

Potential testamentary trust strategies

Working with an experienced Estate and Trust Advisor can help you establish a testamentary trust strategy that meets your specific needs and those of your beneficiaries, so you can do the following:

  • provide ongoing financial support to a spouse, child or grandchild
  • continue to provide financial support for a disabled or infirm family member
  • specify the age at which a child or grandchild can access their inheritance, or direct the funds to a specific use, such as education funding
  • create a legacy for a valued charity or alma mater
  • protect a child’s inheritance from legal actions that might arise from personal, business or marriage-related issues

Putting a testamentary trust to workCase study

Dr. Abel2 wanted to leave a significant inheritance to his daughter, but he was concerned that she wouldn’t have the maturity, knowledge or resources to manage this wealth on her own.

Dr. Abel’s Estate and Trust Advisor at MD Private Trust recommended leaving her inheritance in a trust for her benefit when he dies.

In accordance with the terms of the trust, Dr. Abel’s daughter will receive a steady annual income from the trust, and can access the capital of the trust at the trustee’s discretion to maintain her standard of living. MD Private Investment Counsel will take care of the day-to-day investment decisions required in managing the assets in the trust.

Leaving his daughter’s inheritance in a trust will give Dr. Abel peace of mind knowing that these funds are protected while providing his daughter with access to her inheritance and professional support. He can also be assured that he won’t leave her vulnerable to negative influences or left alone and unsupported with respect to investment decisions.

Your MD Advisor can help you determine if your assets may be more effectively distributed through a testamentary trust.

Learn more about MD's estate and trust offering or contact an MD Advisor to find out how we can help.


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