Advantages of A Testamentary Trust
- A testamentary trust provides a way for assets devolving to minor children to be protected until the children are capable of fending for themselves;
- A testamentary trust has low upfront costs, usually only the cost of preparing the will in such a way as to address the trust, and the fees involved in dealing with the judicial system during probate.
- For individuals with high marginal tax rates a testamentary trust can 'restart' the tax calculation. A testamentary trust allows income from the trust to be taxed as a separate entity (a trust) rather than simply adding the earning/income to the owners income. This provides a way for "lower than marginal tax" rates to be applied. For example the income from the Testamentary trust, if $10,000, might have no tax incurred. Whereas that same $10,000 might lose $4,600 to taxes if the income were attributed to an individual at the highest marginal tax rate.
Read more about this topic: Testamentary Trust
Famous quotes containing the words advantages of, advantages and/or trust:
“In 1845 he built himself a small framed house on the shores of Walden Pond, and lived there two years alone, a life of labor and study. This action was quite native and fit for him. No one who knew him would tax him with affectation. He was more unlike his neighbors in his thought than in his action. As soon as he had exhausted himself that advantages of his solitude, he abandoned it.”
—Ralph Waldo Emerson (1803–1882)
“To become aware in time when young of the advantages of age; to maintain the advantages of youth in old age: both are pure fortune.”
—Johann Wolfgang Von Goethe (1749–1832)
“You can’t trust God to be unmerciful.
There you have the beginning of all wisdom.”
—Robert Frost (1874–1963)