What is a testamentary trust will?
Two common types of wills are simple wills and testamentary trust wills. Under a simple will, an inheritance usually passes outright to a beneficiary, whereas this is not the case for a testamentary trust will (as the inheritance may be for the benefit of the beneficiary under a testamentary trust will, but it does not pass to them outright). Testamentary trust wills are often desired for asset protection and tax effectiveness. The usual considerations for such trusts include:
As a testamentary trust will involves the creation of a trust, it is necessarily more complicated than a simple will.
- beneficiaries (eg children) with a disability;
- vulnerable children;
- spendthrift children;
- children later involved in a family law breakdown (eg divorce or the end of a de facto relationship);
- continuity of an inheritance through the presence of a trust; and
- postponing vesting of the trust until an opportune time.
As a testamentary trust will involves the creation of a trust, it is necessarily more complicated than a simple will.
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