Secure your future with a testamentary trust: the smart way to protect your assets.

What is a Testamentary Trust?

A Testamentary Trust is a type of trust that is established through a person’s will. Unlike a simple will, where beneficiaries receive gifts directly, with a Testamentary Trust, a trustee holds the assets in trust for the beneficiaries.

Asset Protection

One of the benefits of a Testamentary Trust is asset protection. Because the trustee owns the assets instead of the primary beneficiary, creditors and trustees in bankruptcy can’t access them. This can be especially useful for beneficiaries who are in business for themselves and want to safeguard their assets.

Taxation Benefits – Income Splitting

Another major benefit of a Testamentary Trust is taxation advantages. By splitting income among family members, beneficiaries can often avoid paying high taxes and receive more income overall.

For example, children who receive income from a Testamentary Trust are taxed at adult rates, which can be a huge help for families with a non-working spouse and multiple children. Testamentary Trusts can also be structured so that beneficiaries have control over the trust, but a nominated person acts as trustee during periods of incapacity, such as bankruptcy or divorce/marital separation.

Final Thoughts

Overall, a Testamentary Trust can be a great tool for protecting assets and minimising taxes. If you’re considering setting up a Testamentary Trust, be sure to talk to a lawyer, accountant, or financial advisor for guidance on how to best structure it for your individual needs and circumstances.