What is a Testamentary Trust? Do I need one?

A testamentary trust is a trust created pursuant to your Will. There are different types of testamentary trusts, including:

  • Discretionary trusts;
  • Special disability trusts.

You should consider a Testamentary Trust if any of these factors exist:

  • Creditor protection for a beneficiary
  • Protecting assets from family law matters for beneficiaries (e.g. Divorce and property settlement);
  • Protecting assets against new spouses or marriages;
  • Education – you can leave gifts for education purposes;
  • High-Risk Beneficiaries – those in high-risk professions in which their assets may be available to claim against ( e.g. Doctors, Lawyers etc)
  • Risk-Taking beneficiaries/beneficiaries with ongoing issues – gambling addicts, alcoholics, drug abusers, spendthrift etc
  • Taxation benefits – income splitting
  • Will challenges / Family Provisions Claims
  • Disabled Children

It is important to discuss with your Estate Planning Lawyer if a Testamentary Trust is right for you as these documents are extremely complex and create ongoing obligations for the Trustee you appoint.

Contact the team of Penrith Estate Planning Lawyers at Amanda Little & Associates to discuss your Testamentary Trust needs.

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