Why establish a Testamentary Trust (provide for it in your will)?
A testamentary trust allows the executor to invest the estate assets for the benefit of beneficiaries (especially children under the age of 18 years).
It gives control to the executor over the assets and allows the executor to control the future use or disposition of the estate assets.
It can protect assets due to possible family breakdown, possible insolvency of a beneficiary or potential creditor claims of a beneficiary.
It allows flexibility in allocation of income to beneficiaries to minimise tax.
The will maker should nominate a trustee of the trust. The trustee manages the investment of the assets in the trust. Specific conditions for the trust can be made in the will such as the length of time the trust will exist (ie until child’s 18th birthday), nomination of specific assets or amounts to be transferred to the trust, etc.
It is important that you obtain the correct advice to ensure the testamentary trusts are specifically tailored, considering your estate assets and your intended beneficiaries. Please contact your accountant to discuss your estate planning issues.