Testamentary Trust

 

What is a Testamentary Trust?

A Testamentary Trust is incorporated in a Will to provide more control over the distribution of assets to beneficiaries. There are also potential tax benefits too, making them an effective Estate Planning tool.

Upon your death, the Trustee (or Trustees) takes effective control of the trust and its assets. The Trustee must act within the guidelines of the Trust Deed which are determined by the Will maker.

When is a Testamentary Trust considered?

A Testamentary Trust may be considered if beneficiaries:

  • cannot manage or protect the assets themselves;
  • could face bankruptcy or legal action;
  • are experiencing, or are at risk of, family breakdown;
  • face potential tax consequences from the income generated by the assets.

What assets can be part of a Trust?

There are many types of assets that can be held in Trust, including investments, cash, property and valuables such as paintings, furniture or jewellery.

Who can be a Trustee of a Testamentary Trust?

You can choose any person or persons to be the Trustee, usually the Executor(s) of the Will. The Trustee has effective control of the Trust, so should be a person whom you know well and are confident will act according to your wishes and in the best interests of the beneficiaries of the Trust.