A testamentary trust is a type of trust created by a will and activated only after the death of the person making the will (the testator). It allows for greater control over how your assets are managed and distributed after death—particularly useful when providing for minor children, individuals with special needs, or a surviving spouse.

At Law for Georgia, LLC, we guide clients across Georgia in creating comprehensive testamentary trusts that protect their families, minimize tax burdens, and ensure long-term financial security for loved ones.

What Is a Testamentary Trust?

Unlike a living trust, which is created and funded during your lifetime, a testamentary trust is written into your will and only takes effect upon your death. The trust is administered by a trustee you name in your will, who is legally obligated to carry out your instructions regarding the trust’s assets and beneficiaries.

This type of trust provides critical benefits for those looking to:

• Protect young or vulnerable beneficiaries

• Prevent immediate, unrestricted access to large sums of money

• Manage complex family or financial dynamics

• Maximize estate tax savings through strategic trust planning

Types of Testamentary Trusts

Several types of testamentary trusts serve specific purposes. Below are the most common types and how they work:

1. Trusts for Minor Children

This is one of the most common testamentary trusts. Instead of giving children a lump sum inheritance upon your death, the trust:

• Holds the assets until the child reaches a designated age (e.g., 25 or 30)

• Provides for the child’s education, healthcare, and general welfare in the meantime

• Names a trustee to manage and distribute funds responsibly

This structure ensures that your children’s needs are met and prevents financial mismanagement by minors.

2. Trusts for Mentally Incompetent Individuals

If you have a loved one who is mentally incapacitated or has special needs, a testamentary trust:

• Allows assets to be managed by a trustee without affecting eligibility for government benefits (such as Medicaid or Supplemental Security Income)

• Provides long-term financial support and protection

• Can be customized with specific instructions for medical care, housing, and quality of life

These trusts are often referred to as special needs trusts when tailored to protect benefit eligibility.

3. Marital Deduction Trusts

Also known as A-B Trusts or QTIP Trusts (Qualified Terminable Interest Property), these trusts:

• Are designed to take advantage of the federal estate tax marital deduction

• Provide income or benefit to the surviving spouse for life

• Allow the remainder to pass to children or other beneficiaries upon the spouse’s death

• Enable the first spouse to maintain some control over ultimate asset distribution

These are especially useful in blended families or high-value estates where control and tax efficiency are priorities.

4. Credit Shelter Trusts (Bypass Trusts)

A credit shelter trust shelters a portion of the estate from federal estate taxes by:

• Using the deceased spouse’s estate tax exemption

• Holding those assets in trust for heirs rather than transferring them directly to the surviving spouse

• Allowing the surviving spouse to benefit from the trust without including it in their taxable estate

This strategy is effective for high-net-worth individuals aiming to minimize estate tax liability for future generations.

5. Qualified Terminable Interest Property (QTIP) Trusts

A QTIP trust is often used in conjunction with the marital deduction. It:

• Provides lifetime income to the surviving spouse

• Delays the distribution of the trust principal to other beneficiaries (such as children from a previous marriage)

• Ensures that the assets ultimately pass according to the original testator’s wishes

This is ideal for those who want to support a surviving spouse while preserving inheritance rights for children from prior relationships.

How Law for Georgia, LLC Can Help

At Law for Georgia, LLC, we understand that every family situation is unique. Our estate planning attorneys work closely with you to design testamentary trusts that reflect your goals, protect your loved ones, and comply with all Georgia and federal legal requirements.

Our testamentary trust services include:

• Advising on the most appropriate trust structure for your needs

• Drafting wills that incorporate trust provisions tailored to your family and financial situation

• Explaining how your trust interacts with probate, taxes, and government benefit programs

• Helping you choose qualified trustees and successors

• Coordinating your estate plan with other documents such as powers of attorney and health directives

Whether you are a parent, spouse, or caretaker, our firm provides the legal tools to ensure your wishes are honored and your beneficiaries are protected.

Plan for the Future Today

Creating a testamentary trust is a powerful way to extend your care and guidance beyond your lifetime. Let Law for Georgia, LLC help you develop an estate plan that offers peace of mind and security for those you love.

📞 Contact us today at Law4GA.com to schedule your estate planning consultation. We’re here to help you safeguard your legacy.