Testamentary Trusts
When implementing an Estate Plan, it is essential that the end result is what you want. The exercise is pointless unless your assets end up with the people you nominate.
Also, sometimes it is necessary to protect the beneficiaries of your Estate from themselves - not everybody is able to properly manage a large pool of assets.
Many people cringe at the thought of their children throwing away the wealth they have accumulated during their lifetime. Even worse is the prospect of that wealth ending up with their child's former spouse.
It is for these reasons and more that we consider Testamentary Trusts to be an essential part of any Estate Plan.
Testamentary Trusts are Trusts established by your Will, and on your passing your assets are transferred into these Trusts for the benefit of your family members.
Testamentary Trusts offer maximum asset protection for the next generation - the beneficiary does not own the assets of the Trust. They merely control them, and are able to receive the full benefit from the Trust.
This provides protection from many external factors, including but not limited to Family Court settlements, Trustees in Bankruptcy and trade creditors.
Testamentary Trusts also provide a similar degree of flexibility to your "standard" family trust, namely the ability to split income amongst family members. The major advantage with a Testamentary Trust is that, unlike your standard family trust, children aged under the age of eighteen can receive the benefit of the marginal tax rate system, including the tax free threshold ($6,000 for the 2008/2009 income year).
There are many strategies to consider, and no two clients have their Testamentary Trusts structured in the same manner. Phone Glenister & Co to make an appointment to find out more.
|