Testamentary Trusts

Testamentary Trusts provide more control over your assets after your death, so you may want to consider the benefits of a Testamentary Trust with your Will.

A Testamentary Trust can:

• Protect assets in the case of a beneficiary becoming divorced or bankrupt.
• Be designed to pass assets onto children in the event of a surviving spouse remarrying
• Provide for children with disabilities and control the distribution of capital after death.

Testamentary Trusts are created with a Will but do not come into effect until the death of the person making the will. The Testamentary Trust can be either:

• Fixed - vesting of property in the trust is delayed till the beneficiary reaches a defined age
• Discretionary – the trustee has the discretion to determine the distribution of the income and capital between beneficiaries.

Some types of assets cannot be controlled by your Will, including:

• Jointly held property - If you own property with another person as joint tenants, your share in the property does not form part of your estate under your Will but will instead pass automatically to the surviving joint owner upon your death. If property is held as tenants in common, your share in the property does form part of your estate and passes to the beneficiaries of your will upon your death.
• Property held in trust - This passes to or is held for the beneficiaries of the trust according to the terms of the trust.
• Shares - Certain shares in private companies cannot be given by Will so you will need to check the company’s constitution to determine how these shares will be dealt with on your death.
• Superannuation - Your super arrangements may not entitle you to dispose of your super assets by Will, however rules of superannuation funds may differ so you will need to discuss this matter with the administrators of your superannuation fund
• Proceeds of life insurance policies - If you hold a life insurance policy and have nominated a beneficiary of the policy, that nomination takes precedence over the terms of your Will.

Reckon Docs Testamentary Discretionary Trusts are compliant with legislation and customised to meet your specific requirements and circumstances.

Documentation relating to Testamentary Trusts is prepared, reviewed and maintained by Hunt & Hunt, ranked in the top 20 legal firms in Australia, who also provide free over-the-phone legal advice to Reckon Docs clients.

Reckon Docs also updates Testamentary Trust deeds to changes in legislation or specific requirements of the trustee, which are carried out with an independent legal review.