A testamentary trust is any trust established by a Will and does not come into effect until the Willmaker dies.
For example, funds may be held in trust until a beneficiary reaches the age of 25 years. This is a simple, non-discretionary trust with one beneficiary and one condition to be satisfied before the beneficiary receives the gift.
More sophisticated testamentary trusts are those which are established for a number of beneficiaries without fixing the interests of each beneficiary, such as a testamentary trust which is set up for a child and all of that child’s children and grandchildren.
A discretionary testamentary trust may provide benefits such as tax savings and asset protection from the beneficiary’s creditors.
We can explain to you the many different forms of testamentary trusts that may be established by a Will and identify whether you should consider including testamentary trusts for the benefit of your children and other beneficiaries.