Have you considered ways of protecting your assets?

We will outline the provision to activate Testamentary Trusts in the event of your death through your Will.

what is a testamentary trust?

A Testamentary Trust is a trust created by a Will. It is generally a discretionary trust, meaning the Trustee has discretion to distribute income and capital to their chosen beneficiaries and dictates to what extent. The Will sets out who is to have the ultimate control of each discretionary trust created, and this trustee manages the assets of the trust. Real control of the trust rests with the ‘appointor’. They have the power to appoint, remove and replace the trustee.

key benefits of testamentary trusts

Key benefits of incorporating a Testamentary Trust in your Will include:

A Testamentary Trust has two significant advantages for the maker of the Will and the nominated beneficiaries. First, the assets being distributed are protected from any financial or other difficulties that the beneficiary may suffer, and second there are significant taxation advantages in terms of income splitting.

asset protection

Including a Testamentary Trust or Trusts in your Will allows your assets to pass to the Testamentary Trust(s). This can provide additional asset protection to your beneficiaries as the assets pass to a trust in which they are a beneficiary, rather than directly to them.
Asset protection via a Testamentary Trust can be particularly advantageous to beneficiaries who:

tax advantages

The Testamentary Trust structure provides flexibility in the distribution of income to the trust beneficiaries.

Testamentary Trusts can be an advantage for a couple, where the main income earner is taxed at the top marginal tax rate and their partner is not, as income can be distributed to the lower income earner.

Also, minor children under 18 years of age are subject to tax at penalty rates on unearned income. The tax law allows for concessional treatment of assessable income from a trust estate that results from a Will. This allows minor children to be treated with the same tax rates as adults which can often present significant income tax savings.

If you are interested in finding out more about how incorporating a Testamentary Trust may benefit you, please contact Michael Ward on 07 3833 3999.