9 Estate Planning
Testamentary trusts
Testamentary trusts have been used in Wills for a long time.
A testamentary trust is a trust established after a person dies to hold assets for the benefit of the beneficiary. Instead of the beneficiary receiving assets directly from the estate in their own name, the assets go into a testamentary trust controlled by an appointed individual known as the Trustee.
This may be beneficial for a number of reasons, including:
- taxation minimisation, especially when distributing to minors
- protection of estate assets against creditors
- possible protection of estate assets from a relationship breakdown.
Using a testamentary trust within a Will can allow greater control of the assets when they're distributed to the beneficiaries. It can also provide taxation advantages and protect the assets in certain situations.