A testamentary trust is a trust that is contained in a Will and is only operative on death.
There are different types of testamentary trusts depending on your requirements and risk profile.
A flexible testamentary trust can give beneficiaries of your estate significant tax savings by streaming income in a way to lower tax.
Without losing the tax advantages of the flexible form a testamentary trust can be adapted for asset protection to ensure that to the greatest extent possible the property you leave to your family will be kept safe for their lifetime.
Superannuation
Superannuation has become the biggest asset after the family home and more frequently a client’s largest asset.
It is an important estate planning consideration to look at your super and work out how it will be dealt with after your death as superannuation does not automatically become an asset of an estate.
There are numerous ways to deal with superannuation; for example giving control of a self-managed fund to someone you can trust to ensure that your death benefits are paid or by a binding death nomination or by making a nomination in your Will, if the super fund deed allows it.
Our specialist superannuation team is up to date with current legislation and case law to ensure superannuation issues are consistent with your overall estate plan.
Family trusts
Assets in a family (discretionary) trust cannot be dealt with by a Will.
Part of estate planning discussion is about transferring control of the trust to the next generation.
Trusts during the lifetime of the person who established the trust generally work as they are intended. That person controls the trust and the terms of the trust deed govern the family members who are entitled to both the income and capital.
Difficulties can arise with the next generation where there are more differences in opinion as to how a trust is governed. We can put in place documents to ensure equality between children, if that is the desired outcome, and discuss how best to handle the control of the trust after your death.
Guardians for the children
When your children are young, guardians can be appointed to act if both parents die before the children become adults, sometimes with legacies to assist the guardians in providing accommodation etc. for your children.
If you need any assistance contact one of our lawyers at [email protected] or call 6942 1655 for a no-obligation discussion and for expert legal advice.