Planning your Estate? Perhaps a Testamentary Trust can help…

A testamentary trust is a trust created by a valid will that is distinct, at least for tax purposes, from a deceased estate. Whilst there are different forms a testamentary trust can take, they only arise after the death of the testator (a person who has written and executed a will) and after the deceased estate has reached final administration.

Testamentary trusts can be either fixed or discretionary and may be modified to ensure the testamentary trust (and the Will) are valid and operates in the way intended. Structured correctly with your individual wishes and circumstances in mind a testamentary trust can be very valuable.

• Minor beneficiaries of a testamentary trust are not taxed at penalty rates (top marginal rate), they are taxed at marginal rates
• The trustee is taxed under S.99 on undistributed income
• Streaming of income
• Income splitting
• No Capital Gains Tax when assets pass to beneficiaries
• Access to various Capital Gains Tax concessions
• Protection against creditors
• Protection against ex-spouses
• Protection for vulnerable beneficiaries
• Ability to borrow

For all of the above reasons and more a testamentary trust can be an effective method of maximising the benefits for beneficiaries of your will.

Perhaps. Every estate structure and trust structure can be different, depending upon your aims and circumstances. Whilst a testamentary trust will be great for some, it may not be as suitable for others, which is why you should always seek expert advice prior to making a decision.

McFillin Accounting are one of the leading accounting firms in Brisbane and can assist you with further advice on the best structure for your trust.