A testamentary trust establishes a fund for the beneficiaries of the trust through your Will. A Testamentary Trust creates a structure by which the Trustees can administer the Trust Fund in a flexible manner to deal with a Testator’s particular circumstances.
Common reasons for establishing a Testamentary Trust include:
- controlling and protecting family wealth across the generations;
- income tax and capital gains tax efficiency;
- providing a workable, flexible framework for a Beneficiary who is either incapable of managing their own affairs or vulnerable to exploitation;
- creating a structure that allows a spouse or partner to benefit during their lifetime whilst ensuring that children (including those from a previous marriage) are financially provided for in the long term;
- creating separate Testamentary Trusts for each child or limb of the family which can then be independently managed and administered;
- postponing the entitlement of a young child or adult until they are older or have settled down in life whilst allowing money to be spent for their benefit in the meantime;
- providing an additional layer of protection for family assets from potential risks of bankruptcy and family breakdown.
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