Empowering Your Estate Plan with Strategic Trust Solutions
A testamentary trust is one of the most powerful estate planning tools available. Put simply, it is a trust set up in your will that only comes into effect after you pass away. Unlike a simple will that leaves assets directly to your beneficiaries, a testamentary trust gives you far more flexibility, protection, and tax advantages.
Why consider a testamentary trust?
- Tax savings – income can be distributed to beneficiaries in a way that minimises tax, including special tax benefits for children under 18 (around $22,000 tax-free each year).
- Asset protection – inheritance can be shielded from risks such as divorce, bankruptcy, or poor money management.
- Flexibility – your trustee decides each year how income and assets are best distributed, allowing them to adapt to beneficiaries’ needs.
- Control – you can effectively “rule from the grave” by deciding who will control the trust and how your wealth is managed long-term.
Who benefits most?
Testamentary trusts can benefit:
- Families with young children (to protect and provide for them tax-effectively).
- Beneficiaries at risk of divorce or bankruptcy.
- Beneficiaries you may not trust to manage money wisely.
- Anyone leaving a substantial estate (often $500,000+ including super and insurance).
Trusted Expertise in Testamentary Trust Planning
A testamentary trust is not just for the wealthy or complex estates. It can provide lasting tax savings, safeguard your family’s inheritance, and give you peace of mind knowing your estate is protected for future generations.
At Scott Legal, we regularly set up testamentary trusts as part of our estate planning services and can guide you through whether it’s the right option for your family.