If you have accumulated wealth during your lifetime and have concerns about how it will survive after you die (or if you just want to save your heirs considerable tax) then the solution might be a “Testamentary Trust Will”. Here at Fox & Staniland we often get questions about what type of Wills are available and what protection you can give your beneficiaries. The below best apply to investing in a Testamentary Trust Will as they give extra protection than a regular Will especially in the below circumstances.
Any Will can properly pass your wealth onto your spouse, your children, your grandchildren, etc. But if any of them go through a divorce then the assets you left to them could be lost to their ex-husbands, ex-wives, defacto or ex-partners.
You might have a spouse or end up with children or grandchildren who just can’t handle money wisely. Or they may have disabilities that make them incapable of money-management at all, or they may be vulnerable to people who befriend them just to prey on them.
There is always a possibility that your heirs develop addictions to spending, gambling or substances that lead to them losing their inheritance. This will deprive your lineal descendants from ever receiving the benefit of your wealth passing down to them.
For example, you might have a child with three young children. Your child earns $80,000.00 p.a. from his or her job, and you leave him or her enough to invest and generate interest of $50,000.00 p.a. The tax they pay will be about $36,000.00 plus Medicare levy. But if you leave them the same inheritance via a testamentary trust then the total tax could potentially be reduced to only about $18,000.00 plus Medicare levy. This saving could continue for many years.
A testamentary trust will is sophisticated and expensive when compared with a simple Will. It must be considered in conjunction with all your existing estate planning strategies such as your superannuation, but it could be a very good investment if the above issues concern you. If you think a Testamentary Trust Will is for you (or if you want any estate planning advice) call David Gordon on (02) 9440 1202 or email firstname.lastname@example.org to make an appointment or discuss over the phone.