A testamentary trust, created within a will, absolutely can divide assets equally, but the simplicity of that statement often belies the nuances involved in achieving truly equitable distribution, especially when dealing with complex asset types or family dynamics. While a will can clearly state a desire for equal division—say, dividing an estate into three equal shares for three children—the actual implementation through a testamentary trust requires careful drafting to avoid unintended consequences or legal challenges. It’s crucial to remember that “equal” doesn’t always mean “identical” and may necessitate creative solutions for assets that aren’t easily divisible. Approximately 55% of Americans do not have a will, leaving asset distribution to state law, which rarely allows for the same level of personalized, equal division that a testamentary trust can offer.
What happens when assets aren’t easily divided?
Consider a situation involving a family home, a business, and several brokerage accounts. Dividing the brokerage accounts is straightforward, but what about the house? Selling it and splitting the proceeds equally is one option, but it might not be desirable if a family member wants to keep the property. A testamentary trust can dictate that the house be awarded to one beneficiary, with that beneficiary compensating the others for their equal share of the value. Similarly, a closely held business presents challenges. Assigning shares to multiple heirs might create management disputes, so the trust can authorize the trustee to buy out the other heirs’ interests or maintain the business with a specific management structure. According to the U.S. Small Business Administration, approximately 30% of family-owned businesses don’t survive into the second generation, often due to a lack of succession planning, highlighting the importance of addressing business ownership within estate planning.
How does a testamentary trust differ from a living trust when dividing assets?
While both testamentary and living trusts can achieve equal asset division, they operate differently. A living trust is established during the grantor’s lifetime and allows for asset transfer and management before death, potentially avoiding probate. A testamentary trust, however, comes into existence *after* death through the provisions of the will. This means the assets are subject to probate before being distributed according to the trust terms. Probate can be time-consuming and costly, potentially delaying the equal division of assets. It’s estimated that probate can take anywhere from six months to several years, depending on the complexity of the estate and the court’s backlog. Steve Bliss, as an estate planning attorney, often advises clients on the benefits of living trusts for streamlining asset distribution and minimizing estate taxes.
What went wrong for the Millers?
I remember the Millers, a lovely couple who came to Steve seeking help after a family tragedy. Their father had passed away without a clearly defined estate plan. While his will stipulated that his three children should receive equal shares, it didn’t establish a testamentary trust. This meant the estate went through a lengthy and contentious probate process. The primary asset was a successful landscaping business, and each sibling wanted control. Accusations flew, legal fees mounted, and the business suffered. The siblings ended up in mediation, and the ultimate settlement wasn’t equitable. The business was sold for significantly less than its value, and each sibling received a smaller share than they would have if a properly structured testamentary trust had been in place. They lamented, “If only Dad had taken the time to create a trust, this would have been so much easier.” This situation underscored the critical need for professional estate planning.
How did the Harrisons find peace of mind?
The Harrisons came to Steve seeking to avoid a similar fate. They had a substantial estate, including a vacation home, several investment accounts, and a collection of antique cars. They wanted to ensure their two children received equal shares, but they also wanted to protect the assets from potential creditors or mismanagement. Steve crafted a testamentary trust within their will, outlining a clear distribution plan. The trust specified that the vacation home would be sold, and the proceeds divided equally. The investment accounts were to be held in separate trusts for each child, with a trustee responsible for managing the funds. The antique cars, a sentimental item, were to be appraised and awarded based on each child’s expressed preference, with a financial adjustment made to ensure equal value. Years after the parents passed, the children praised the clarity and fairness of the plan. There were no disputes, and the estate was settled smoothly, allowing the family to grieve without the added stress of financial complications. It’s a perfect example of how careful planning, facilitated by an experienced estate planning attorney, can bring peace of mind and protect a family’s legacy.
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About Steve Bliss at Wildomar Probate Law:
“Wildomar Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Wildomar Probate Law. Our probate attorney will probate the estate. Attorney probate at Wildomar Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Wildomar Probate law will petition to open probate for you. Don’t go through a costly probate call Wildomar Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Wildomar Probate Law is a great estate lawyer. Probate Attorney to probate an estate. Wildomar Probate law probate lawyer
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Services Offered:
- estate planning
- pet trust
- wills
- family trust
- estate planning attorney near me
- living trust
Map To Steve Bliss Law in Temecula:
https://maps.app.goo.gl/RdhPJGDcMru5uP7K7
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Address:
Wildomar Probate Law36330 Hidden Springs Rd Suite E, Wildomar, CA 92595
(951)412-2800/address>
Feel free to ask Attorney Steve Bliss about: “What is a pour-over will and when would I need one?” Or “How can payable-on-death accounts help avoid probate?” or “Can I be the trustee of my own living trust? and even: “What is a bankruptcy discharge and what does it mean?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.