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9 Estate Planning

Testamentary trusts

Testamentary trusts have been used in wills for a long time.

A testamentary trust is a trust established after a person dies to hold assets for the benefit of the beneficiary. Instead of the beneficiary receiving assets directly from the estate in their own name, the assets go into a testamentary trust controlled by an appointed individual known as the Trustee

This may be beneficial for a number of reasons, including:

  • taxation minimisation, especially when distributing to minors
  • protection of estate assets against creditors
  • protection of estate assets from a relationship breakdown.

Using a testamentary trust within a will can allow greater control of the assets when they're distributed to the beneficiaries. It can also provide taxation advantages and protect the assets in certain situations.

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