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Home » Our Services » Creating a Testamentary Trust

Creating a Testamentary Trust

You may consider creating a testamentary trust in your Will. A Testamentary Trust is a trust created by a Will that comes into effect on the death of the testator (the person who made the Will). A Trust is an ownership structure, whereby the assets of the Trust are controlled by the trustee, but held for the benefit of individuals (the beneficiaries to the Will). There are different types of Testamentary Trusts, such as Discretionary Testamentary Trusts, Protectionary Testamentary Trusts and Charitable Testamentary Trusts. We can assist you in working out what type of Trust structure is appropriate for your circumstances so that you achieve what you intend for your Will.

A Discretionary Testamentary Trust can provide income tax advantages and asset protection advantages for your beneficiaries.

Income tax advantages may be available because taxable income generated by the Trust can be allocated to the beneficiaries in the most tax-effective manner. Beneficiaries of a Discretionary Testamentary Trust who are under the age of 18 years will be taxed at normal adult marginal rates, rather than at the higher penalty tax rates which would be payable for Trust income distributions under a normal inter vivos family trust.

Asset protection advantages may flow in the event of the bankruptcy or marital breakdown of a beneficiary. This is because the beneficiary does not legally own the Trust assets, the trustee does, and so the Trust assets may be protected. We can advise you further in relation to the advantages that may be available through the use of Testamentary Trusts for your individual circumstances.


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