Testamentary Trust Planning

This type of trust (testamentary: included in the will) is very useful for a family with young children. The survivors benefit from this in future tax savings. The tax savings result from the trust earnings being taxed in the child's hands. Since the children make little or no income, no taxes are incurred.
Here's an example of how this testamentary trust works: When the insured dies, his/her life insurance proceeds are transferred into this trust, with the remaining property going to the surviving spouse.
In the trust documentation, it is indicated that the beneficiaries are the children and spouse, the spouse is also the trustee. The spouse is now able to spend the trust money in the interests of the children. These expenditures such as camps, computer purchases, and any other purchase that aids in the progress or enrichment of the children's life are eligible.