A Testamentary Trust Will is simply a Will which has a Trust included within the terms and clauses of the Will itself.
A Trust is created when someone gives something to someone else for the benefit of a beneficiary (they hold that gift on trust for the person to whom it has been provided to). The formal terms are the person establishing the Trust or giving the benefit is a “Settlor“. The person holding the gift on behalf of the person to receive it is the “Trustee“. The person who receives the benefit of the gift is the “beneficiary“.
In the context of a Will, the person who is making the Will is the Settlor in our equation. They will usually leave an amount of money or assets to someone else to control in their capacity as Trustee for the benefit of their spouse or children who are the ultimate beneficiaries. The parent can dictate the terms and conditions of the Trust to determine how much the beneficiary is to receive, when they receive it and at what age.
The role of the Trustee or Trustees in these circumstances is crucial. They must control the money or the assets in accordance with the terms and conditions of the Trust to ensure that the parents’ wishes are carried out. Ultimately there needs to be some flexibility in relation to the Trust to cater for changed circumstances or extraordinary events (e.g. life threatening illnesses which require unexpected expenditure on medical expenses or extreme financial hardship requiring an earlier release of funds).
A Testamentary Trust is also an effective protection mechanism between spouses to ensure that the surviving spouse is not taken advantage of by “predators or creditors“. It can also protect the surviving spouse from making unwise investment decisions insofar as it relates to the notional half share of the deceased spouse and ensures that this asset flows through to the children and/or grandchildren. Likewise, it is important that the Trustees appointed to control the Trust are independent so that the Trusts are observed by the surviving spouse.
For any enquiries regarding Attwood Marshall’s Will and Estate Administration Department, please contact the Department Manager Donna Tolley, on direct line (07) 5506 8241 or by email on firstname.lastname@example.org.
Attwood Marshall Lawyers
Northern NSW & Gold Coast, Queensland – Coolangatta | Robina | Brisbane | Kingscliff
Gold Coast Estate Planning, Estate Plan, Will Planning