What is a Testamentary Trust?

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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.

Have a question for our Estate Planning Lawyers?

Please contact the team of Penrith Estate Planning Lawyers at ALA Laws to discuss your Testamentary Trust needs.

Give us a call!

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