Testamentary Trusts

If you have young children, want to control how assets are used after death, have a blended family, are concerned about asset protection or want long term support for beneficiaries, a Testamentary Trust as part of your Will should be considered.

A Will is made that includes a Testamentary Trust. The Will maker dies. The executor of the Will carries out the Will terms including the transfer of assets to the trust. The trustee(s) of the trust who can be the executor(s) or others then manage the trust for the specified beneficiaries.

The trustee controls the trust in being the legal owner of the trust assets with the responsibility to manage them in the best interests of the beneficiaries. The trustee who can be more than one, would usually be a trusted family member or friend who has sound financial and asset management abilities.

The trustee follows the instructions in the Will regarding when and to whom to distribute assets. Sometimes the trust leaves it up to the trustee to decide when and how to use and distribute the assets. They can then meet the beneficiaries' needs and best interests. A trust like this gives you control over when and how your beneficiaries get their inheritance.

Yes, a life interest benefit can be set up within the trust. A life interest benefit means a person will benefit from an asset for the rest of their life but will not actually inherit it. A trust may allow a beneficiary for the rest of their life:

• to live in a property with portability terms.
• receive rental income from a property.
• receive income on invested assets.

After your death, the assets then pass on to other family members or whoever you included in your Will.

This is set by law, and the maximum period is 80 years, however, it is usual for trusts to end earlier- the exact length will depend on what the Will says.