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Testamentary Trusts
Testamentary trusts can be very useful in structuring the division of your assets in your Will, particularly in circumstances where you have substantial wealth or children under 18 years of age.
Testamentary trusts are simply a type of trust that you use in your Will. They operate in a similar way that a family discretionary trust does during your lifetime.
What are the benefits of using a testamentary trust to structure your gifts?
- In circumstances where you are concerned a beneficiary of your Will may become bankrupt, the trust can be used as a tool to protect the assets from creditors;
- If you are concerned that a beneficiary’s marriage may not last then the assets within the trust are protected from any Family Court Orders made in a property settlement;
- If a beneficiary of your Will finds themselves unable to manage their affairs, then the assets can be dealt with by someone else for their benefit;
- There are tax advantages as children enjoy a tax free threshold of $6,000.00 – for example by leaving gifts to the children, your husband or wife can lessen the burden of tax payable on the income derived from the property you have left them by distributing it to other family members with lower incomes.
Consider the use of a testamentary trust in situations where you have young children or your are concerned that once you have passed away, there is a possibility the assets may be threatened by actions of third parties.
Click here to ask Andrew Wiltshire and the team more about this Service
