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What is a Testamentary Trust?

If you are thinking about doing a new will, a testamentary trust in your will may be something to consider. A testamentary trust is simply a trust established under a will which doesn’t come into existence until the will maker dies. There are both tax and asset protection advantages to testamentary trusts.

If you have any queries about testamentary trusts in wills or any other aspect of estate law we can be contacted on 07 5443 9988 or[email protected].

Argon Law is a Sunshine Coast law firm based in Maroochydore.  We are commercial lawyers and wills and estate lawyers and are eager to assist you in any way we can.

More Information

If you are thinking about doing a new will, a testamentary trust in your will may be something to consider.

Under a trust you have a trustee who holds assets and beneficiaries who receive the benefit of those assets.  A testamentary trust is simply a trust established under a will which doesn’t come into existence until the will maker dies.  Such trusts are most commonly discretionary trusts under which there are a number of beneficiaries (often members of the same family) and the trustee can decide from year to year which of those persons receive benefits.

There are both tax and asset protection advantages to testamentary trusts.

The tax advantages include the ability to distribute income to those beneficiaries who pay the lowest tax and to distribute income to children at adult marginal tax rates.

The asset protection advantages include protection of the assets from the creditors or even bankruptcy of beneficiaries as well as from the personal problems of beneficiaries such as substance abuse, gambling, bad relationships or just poor financial decision making.

Just by separating the trust assets from the personal assets of the beneficiary can often lead to better management of those assets.

There are both tax and asset protection benefits to testamentary trusts but they are not appropriate in every situation, so you should seek specialist advice or call us and we will be happy to answer your queries.

If you have any queries about testamentary trusts in wills or any other aspect of estate law we can be contacted on 07 5443 9988 or[email protected].

Argon Law is a Sunshine Coast law firm based in Maroochydore.  We are commercial lawyers and wills and estate lawyers and are eager to assist you in any way we can.

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