A Testamentary Trust is a trust that can be incorporated into your Will to add extra protection and security on your assets. It allows your beneficiaries flexibility while providing the best defence against third parties claiming against your assets.
Benefits of a testamentary trust
Advantages of the Testamentary Trust
There are various advantages to including a Testamentary Trust which include the following:
Testamentary trusts explained
A testamentary trust is a trust that has been established by Will and only comes into existence upon your death. It is generally discretionary where the trustee has full discretion about who benefits, and to what extent. The maximum length of time for which a testamentary trust can operate is 80 years.
A trust is a legally binding relationship between one person ("the testator" - if the trust is created by Will or "the settlor" - if the trust is created during your lifetime) who transfers assets ("the Trust Fund") to a person ("the Trustee") who then holds the assets for the benefit of an individual or group of people ("the beneficiaries").
Benefits of a Testamentary trust
There are many potential benefits to including a testamentary trust into your Will:
Protect your estate
perhaps the greatest benefit of the testamentary trust is protection
If estate assets pass directly via Will to a beneficiary, those assets will immediately become available to any person who wishes to make a claim against them. This includes that beneficiary's creditors if they are bankrupt or in financial difficulty.