For a testamentary trust, the donor drafts a new will or revises an existing will in which the terms of a testamentary CRT are set out. Here, the will is drafted in the usual way, and provisions for the trust are contained in specific clauses. Although in this case the trustee is not a signatory to the will, the trustee must nevertheless agree to act. The testamentary CRT is irrevocable, and will only be established upon the death of the donor. The donor has extensive holdings, is in a high marginal tax bracket, has a philanthropic intent and the ability to donate some of their assets.
Donors wishing to be free from investment decisions and concerns are ideal prospects.
The provision of lifetime income to the donor. An immediate tax receipt. Donor is free from investment worries. An estate planning tool which avoids probate, is non-contestable and provides privacy. Provision of a tax receipt to the estate.