A testamentary trust creates a structure that gives you more control over how your finances and assets are distributed during your estate planning. They provide clear guidelines that determine how your wealth is distributed, along with a few other big benefits:
Improved asset protection. A testamentary trust puts clear steps in place to ensure your wealth is managed correctly by your beneficiaries. This can be particularly useful if you’re worried about their skills in financial management, or you want to protect your assets against future marital problems.
Better tax minimisation. Through a testamentary trust, you can determine the exact rules for distributing your finances and assets. This allows you to distribute your wealth in the way that’s going to best minimise the tax the beneficiary pays. This can include methods such as in lump sums across different financial years, or streaming any income to beneficiaries with lower marginal tax rates.