Given the increasingly complex nature of life and families, particularly blended families, it’s more important than ever you plan your estate and Will to appropriately protect your most vulnerable beneficiaries. This might include children and/or grandchildren, or dependents that are incapacitated in one way or another. A great way to do this is with the inclusion of a testamentary trust in your Will.
We’re experienced estate planning lawyers in Cairns. Testamentary trusts will help protect an inheritance for your beneficiaries.
A testamentary trust is a trust established by a Will. It starts to operate on the death of a Willmaker and its terms are set out in the Will. The terms of the testamentary trust can be tailored to suit the Willmaker’s circumstances, including those members of the Willmaker’s family that they wish to benefit from their estate.
Testamentary trusts can be used for a variety of purposes including providing a fund for the education of children or grandchildren, or preserving an inheritance for the benefit of a beneficiary who is bankrupt, a spendthrift, has a substance addiction or has some special needs (i.e. a physical or mental disability).
We are regularly asked by our clients to prepare Wills with testamentary trusts. If you are interested in discussing the preparation of a Will with a testamentary trust, please contact us.
Here’s An Example of Why they Work.
“I am worried that my daughter Jane’s marriage won’t last and I don’t want her lazy no good husband to take a large chunk of everything I have worked hard to build”. If this sounds like you, then one possible solution to that problem is to make sure Jane’s inheritance is left to her in a well drafted testamentary trust, set up under you and your spouse’s Wills. If Jane’s marriage fails once you’ve both died, her inheritance can be quarantined from Family Court property settlement proceedings with John.
Many parents are concerned that the inheritance they leave to their children could end up in the hands of a former son-in-law or daughter-in-law if their child’s marriage breaks down. That inheritance can be kept separate and protected from becoming available to the ex-spouse, with a properly drafted testamentary discretionary trust.
A testamentary trust may be created using specified assets, a designated portion of your estate or the entire remaining balance of your estate. Multiple trusts may be created by the one Will. How successfully the assets are protected, depends on how the Will and the testamentary discretionary trust are drafted and the circumstances at the time of the relationship breakdown.
Who Is In Control?
Whoever is named in the Will as trustee controls the assets of the testamentary discretionary trust. Like any trust, a testamentary discretionary trust can be drafted with as much flexibility as desired. The trustee can be given full discretion or limited discretion as to who should receive income and capital from the testamentary discretionary trust and when they should receive it.
If you want to discuss your current or potential estate planning needs, including setting up a testamentary trust, come in and talk with us about the many options for the future well-being of your family. Contact Brien Leibinger Lawyers today on (07) 4225 5420 or firstname.lastname@example.org
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