When preparing a will, most of us want to make sure that we benefit those of our choice but few people stop and think about the potential tax consequences or the likelihood of a third party claiming a share of the estate.
A testamentary discretionary trust (TDT) can help. Under a TDT the Executor controls the assets and determines who benefits during the life of the trust, which may be for 80 years or more from the date of death. The assets in the TDT are not those of the beneficiary under the will, they are held by the Executor. For the income of the trust a beneficiary is also treated as a normal adult taxpayer regardless of their age, and the Executor determines who gets the income and in what proportions. This can mean substantial tax savings.
Lister Mason can provide you with detailed taxation advice regarding the benefits of a TDT. If you would like to incorporate a TDT into your will, please speak to Peter Rusbourne and the team at Watkins Tapsell on 02 9545 7207 or peter.rusbourne@watkinstapsell.com.au.
This article has been written by Peter Rusbourne. He is a Partner at Watkins Tapsell Solicitors in Kirrawee. Peter has over 30 years experience in wills and estates, and business law. He is also a Law Society accredited specialist in Business Law and Property Law. He is often involved in assisting our clients to ensure that their estate planning protects their assets, their businesses, and their families.
