Wills and Testamentary Trusts

1. Wills and Testamentary Trusts

2. The average Australian gets a tax refund of $2,574. This year, the Low and Middle Income Offset of up to $1,080 is also available to some. White & Mason Lawyers’ wills and estates lawyers can assist with drafting a will to care for your family when you are no longer around to do so. In certain circumstances, it is advisable to include a testamentary trust within your will.

3. What is a testamentary trust? A testamentary trust is established in a person’s will, and is activated after their death. It is created to hold all or some of a person’s assets, for the benefit of others, known as beneficiaries. A trustee is nominated in a will to manage the trust assets and is responsible for distributing the assets to the beneficiaries as per the terms outlined in the will.

4. Benefits • Flexibility and control over when and how your beneficiaries receive their inheritance The trustee can distribute capital or income to any nominated beneficiary at any time where the will instructs the trustee to, or where the Will allows the trustee to use trust assets for the needs and best interests of the beneficiaries. For example, you can restrict assets or distributions to a particular beneficiary, such as young children.

5. You can also set up a life-interest benefit allowing a person, for example a spouse, to benefit from an asset for their lifetime, after which it can be passed on to other family members. • Tax advantages Taxable income that is generated by the trust can be allocated to the beneficiaries in the most tax effective way, for example, distributions to minors up to the tax-free threshold for children’s expenses.

6. Protection of assets The trustee holds the title to the trust’s assets, so this protects the assets from any court proceedings against beneficiaries. Contact White & Mason Lawyers to discuss whether a testamentary trust is the right option for you.