Bayside Testamentary Trusts
Your Guide to Testamentary Trusts
Safeguarding Your Assets, Empowering Your Loved Ones
Testamentary Trusts in Australia
Standard Wills give you some level of reassurance — you know that your assets will be distributed to your beneficiaries and in line with your wishes. However, they can also be frustratingly inflexible — leaving your legacy open to possible future mismanagement or dilution. Testamentary Trusts proactively defend your bequest.
As powerful estate planning tools, their structure gives your loved ones the greatest protection and benefits — empowering you to go beyond just naming inheritors. You can create your Trusts to provide ongoing support, protect assets for future generations, and minimise tax burdens for your inheritors.
At Bayside Wills and Estates Lawyers, we understand the importance of ensuring your loved ones receive the bequest they deserve. Guiding you considerately and compassionately, we will deliver a secure inheritance plan that will give you immense peace of mind.
Testamentary Trusts Explained
A Testamentary Trust is a robust safeguard for your legacy.
Established within your Will and only coming into force when you pass, it’s a legal framework where your assets are transferred to a designated Trustee or Trustees for management and distribution — according to your wishes. These assets could include all of your estate, or proportion stated by you, the Testator.
Your Trustees typically have the flexibility to determine who receives an inheritance, how much, and when — while following the guidelines you state in your Trust document. This ensures your wishes are prioritised, even after you’re gone.
Most trusts are discretionary — giving the Trustee flexibility in distributing income or capital gains to the beneficiaries. Unlike some trusts, the beneficiaries don’t have automatic access to inherited assets. Instead, they only receive a share when the Trustee decides to allocate it.
A Testamentary Trust Will Protect Your Loved One — Arrange One NOW!
Testamentary Trust Advantages
While Testamentary Trusts offer numerous benefits, how applicable they are to you depends heavily on your unique situation and, crucially, the circumstances of your beneficiaries.
At Bayside Wills and Estates Lawyers, our team of Trust solicitors take a proactive and understanding approach. We’ll guide you through whether a Testamentary Trust is the right fit for you — crafting a reassuring plan that reflects your wishes and intentions.
Testamentary Trust Disadvantages
A Testamentary Trust can provide you and your loved ones with numerous benefits — but, your individual circumstances may mean there are some drawbacks.
At Bayside Wills and Estates Lawyers, our friendly and professional team of expert solicitors will consider your estate and affairs, and provide considered advice on whether a Testamentary Trust is suitable.
The Two Types of Testamentary Trusts
Testamentary Trusts offer flexibility, but choosing the right type for your needs is vital. Here are the two most common structures:
Discretionary Testamentary Trust
This Trust format empowers the beneficiary to utilise, invest, and control assets as they wish — with the Trustee typically being the beneficiary. That said, third parties may be appointed instead, or added to be joint Trustees.
In discretionary Testamentary Trusts, there are minimal limitations on how the estate’s assets are managed.
Capital Protected Testamentary Trusts
This type of Testamentary Trust is generally used when there is uncertainty about how reasonably a beneficiary will manage the inherited assets and funds. To prevent money from being wasted or squandered, it safeguards — to a limited degree — where the assets go, and to what value.
Depending on the Trust, the terms might permit beneficiaries to receive a regularly distributed income, not a lump sum. Or, only allow them to acquire a limited proportion in a given period. Third parties can be empowered as Trustees to determine its allocation.
Unsure What Testamentary Trust Type Is Most Suitable for You?
Can a Testamentary Trust Be Contested?
It is still possible to challenge provisions in Testamentary Trusts. This usually involves challenging the Last Will and Testament in which the Trust is established.
In virtually all circumstances, a dispute can only be raised by an eligible person — typically a spouse or dependent of the deceased. If successful, this could mean that assets earmarked for the Testamentary Trust being used to satisfy a Family Provision claim.
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Contesting if You’re NOT a Beneficiary in the Trust
If you are an eligible person, you will need to demonstrate to the court that the Testator did not include you in their Will and Trust, the provision does not sufficiently address your needs for proper maintenance, and they had a moral duty to do so.
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Contesting if You ARE a Beneficiary in the Trust
If you are a beneficiary, yet still wish to make a claim for further provision out of the estate, you will need to show that while you receive some inheritance from the Testator, the amount does not meet the requirements of suitable provision.
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Should I Contest a Testamentary Trust?
Disputing a Will and Testamentary Trust can be stressful and emotionally challenging.
It might feel disrespectful, selfish, or inappropriate to challenge the alleged wishes of the deceased. However, you need the reassurance of knowing that the Will and Trust are fair and equitable — and that you and your wellbeing were suitably provided for.
At Bayside Wills and Estates Lawyers, our understanding solicitors will considerately advise you on Testamentary Trust disputes. We will talk you through the whole process, and discuss whether your contest would be successful.
How To Set Up a Testamentary Trust
Testamentary Trusts offer a reassuring way to protect your loved ones’ inheritance and ensure your wishes are met. But navigating the complexities can be daunting and challenging — you need expert advice.
At Bayside Wills and Estates Lawyers, our experienced team will guide you with patience and understanding through the Testamentary Trust planning process. We’ll work closely with you to create a personalised framework that maximises the benefits for your beneficiaries.
Here is the process you can expect:
- Type and format — you decide on the trust type, what assets you wish to include, who will benefit, and when and how allocations will be made. This will be stated in your Will.
- Nominate a Trustee — select someone who you trust. This could be a friend, a professional, or a family member. Ensure that the person(s) you opt for is happy to accept this position.
- Drafting of the Will — including the name of the Trustee(s), who will benefit, and the Trust terms.
- Sign and Witness the Will — you must sign your Last Will and Testament in front of two witnesses, who also need to sign the document.
Testamentary Trusts — A Versatile and Powerful Tool for Estate Planning
Robust Wills and Estate planning isn’t complete without considering Testamentary Trusts.
Forming an integral framework within your legacy structure, they offer sophisticated flexibilities and protections — particularly if you have complex affairs, significant assets, or numerous intended beneficiaries.
Bayside Wills and Estates Lawyers will advise on the advantages of Testamentary Trusts as part of a holistic approach to your legacy and succession planning. This may also include Enduring Powers of Attorney, Probate, International Estate Planning, and Medical Treatment Decision-Making documents.
Powerful Estate Planning Requires a Comprehensive Strategy — Learn More
Safeguarding Your Legacy With Our Expertise
At Bayside Wills and Estates Lawyers, we understand the emotional toll that navigating post-death matters can take. That’s why our dedicated team of Testamentary Trust solicitors offer compassionate guidance throughout the entire process.
We’ll clearly explain the benefits and drawbacks of Testamentary Trusts, how they integrate with your overall Estate Plan, and if one suits your specific circumstances.
Tailored Testamentary Trusts can shield your assets from unwanted claims, excessive taxes, or potential financial mismanagement by an inheritor. Schedule a consultation with us — by being proactive today, you can ensure your Will maximises the advantages for your loved ones.
Reassurance for you and loved ones — minimise disputes, ensure their wellbeing.
Informed decisions — allowing you to manage your estate effectively.
Expert guidance — a legal team proficient in Testamentary Trusts.
Clear communication — complex Trusts explained in clear language.
Tailored Testamentary Trusts — reflecting your unique circumstances.
Proactive — a Testamentary Trust today safeguards tomorrow.
Understanding — considerate advice for emotional end-of-life planning.
Testamentary Trust FAQs
So, what is a testamentary trust? It’s a legal framework, created in your Will and taking effect after you pass. It empowers you to control how your estate is managed and distributed after your death — in a more flexible manner than a standard Will.
Your appointed Trustee decides who receives an inheritance, how much, and when — in accordance with your wishes.
Testamentary Trusts are like responsible parents giving pocket money to their children.
Instead of giving their kids a lump sum to cover them from birth to 18 years (the Will structure), they allocate pocket money over set periods and at a rate they require for their circumstances (the Testamentary Trust structure).
Yes, Testamentary Trusts in Australia are irrevocable. Once you pass and the Trust comes into effect, it’s difficult for third parties to cancel or change.
However, while you are alive, you can amend your Testamentary Trust as often as you would like.
The price of setting up a Testamentary Trust can vary depending on several factors. These include the type of Trust you choose, the number of people involved (Trustees and beneficiaries), the overall value of your legacy, and how complex your wishes are.
When comparing a Will vs Testamentary Trust, it’s important to remember that a Testamentary Trust is established as part of your Will.
The Will itself is a legal document that outlines your wishes for how your assets will be distributed after your death. It names an executor who handles the administration of your estate, and directly transfers ownership of your assets to your beneficiaries.
If you include a Testamentary Trust, this framework creates a separate legal entity that holds some or all of your assets after you pass. You appoint a trustee to manage the trust (in your Will) and they preside over how your assets are distributed.
Yes. You can add assets to your Testamentary Trusts during your lifetime, and specify them in your Will. Once you pass, further assets may not be added. However, the Trustee may have the power to manage the assets in the trust (e.g. a share portfolio or property portfolio) and make changes to the portfolio based on investment advice.
Secure Your Legacy Today with Bayside Wills & Estates Lawyers
Schedule a consultation today and let our accredited specialists guide you towards comprehensive estate planning and administration solutions tailored to your unique needs