What is a Testamentary Trust Will? Benefits, Workings, and Why You Might Need One

What is a Testamentary Trust Will?

A testamentary trust Will is a type of Will that creates a trust upon your death. Instead of directly distributing your assets to beneficiaries, a testamentary trust holds those assets under the control of a trustee, who manages them according to the terms set out in your Will.

This arrangement provides several benefits, such as asset protection, tax efficiency, and greater flexibility in how your estate is distributed.

How Does a Testamentary Trust Work?

When you pass away, the assets in your estate (such as property, cash, or investments) are transferred into the testamentary trust instead of being given directly to your beneficiaries. The trustee (whom you appoint in your Will) is responsible for managing the assets in the trust and distributing income or capital to the beneficiaries according to your instructions.

Why Choose a Testamentary Trust Will?

1. Asset Protection:
   • Protects assets from creditors or financial risks that your beneficiaries may face, such as bankruptcy or divorce proceedings.
   • Keeps assets secure for beneficiaries who are minors, have disabilities, or need guidance in managing finances.
2. Tax Efficiency:
   • Income generated by the trust can be distributed to beneficiaries in a way that minimises their tax liability. For example, income may be distributed to beneficiaries in lower tax brackets, including minor children who are eligible for specific tax exemptions under a testamentary trust.
3. Flexibility:
   • The trustee can adjust distributions over time based on the needs of the beneficiaries or changing circumstances.
4. Control Over Assets:
   • You can set specific conditions for when and how assets are distributed. For instance, you might specify that a child only gains access to their inheritance after reaching a certain age or achieving a milestone, such as completing university.

Who Should Consider a Testamentary Trust Will?

A testamentary trust Will is particularly beneficial if:

• You have a large or complex estate.
• You want to protect assets from external risks, such as creditors or family law disputes.
• Your beneficiaries are young, financially inexperienced, or have vulnerabilities.
• You wish to maximise the tax benefits of your estate for your beneficiaries.
• You want to retain control over how and when assets are distributed to your beneficiaries.

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How Aylward Game Solicitors Can Help

At Aylward Game Solicitors, we have extensive experience crafting tailored testamentary trust Wills. We will guide you through the process, explain the options available, and ensure the terms of the trust align with your goals and your family’s needs. Whether you’re seeking simplicity or advanced asset protection strategies, we’re here to help.

Start your estate planning today to protect your loved ones and provide for their future. Contact us for an appointment in Brisbane, the Gold Coast, or at your home for added convenience.