Most parents don’t set up Wills incorporating testamentary trusts to save tax.
Most don’t even know about the possibility.
They set them up to protect their children.
Testamentary trusts are commonly used to help protect inheritances from:
• divorce and family law disputes
• bankruptcy and creditors
• addiction and gambling
• vulnerable relationships
• poor financial decisions
• beneficiaries inheriting too young
For many Australian families, these structures are not tax vehicles, but long-term asset protection and succession planning tools.
The proposed changes to testamentary trust taxation are therefore causing concern for many families and estate planning practitioners. At this stage, the full detail of the changes is still unknown and further information is expected soon.
While it is too early to determine exactly how any legislative changes may operate, these developments highlight the importance of regularly reviewing your estate planning arrangements to ensure they continue to achieve your intended outcomes.
As further details become available over the coming months, clients may wish to consider reviewing their existing Wills and estate planning structures.
If you currently have a Will containing a testamentary trust, or would like advice about whether such a structure may still be appropriate for your circumstances, we encourage you to contact our office.
Contact Crest Lawyers to review your Will or discuss whether your current estate plan still achieves the protection intended for your beneficiaries.