A Testamentary Trust is type of Trust that can only be created in a will and comes into effect only after the death of the will maker. So instead of your assets being distributed direct to individuals they are held in trust and the income earned is distributed to nominated beneficiaries.
It is good for people who have children under the age of 18 as the distributions the child receives from a Testamentary Trust are taxed as if they were adults. This means the children can take advantage of the tax free threshold of $18,200 (normally under 18’s only get $416 of investment income tax free).
A Testamentary Trust can also be appropriate for asset protection purposes as the trust’s assets are not owned by any individual but by the Trust itself.
Testamentary Trusts are great in cases of:
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