Testamentary Trusts
A testamentary trust (TT) is simply a trust established under your will. The TT commonly takes the form of a family discretionary trust.
Benefits of a TT
A TT is a common estate planning tool to divide your estate amongst various classes of beneficiaries. The benefits of a TT are:
- distribution of TT income and capital amongst a broad class of beneficiaries as defined in the TT deed;
- asset protection because the assets of a TT are owned by the trustee of the TT and not be the beneficiaries of the TT;
- a life of up to 80 years which means the TT can be used to transfer control over the TT assets to a second generation of the deceased;
- tax effective distribution of TT income because each beneficiary (including minors) of the TT receives the tax free threshold (currently $18,200 for the 2018 and 2019 years).
If your property portfolio is complex, you may wish to incorporate a TT in your will. A W Pitman & Co can prepare your Estate plan including tailoring your own TT for peace of mind.
