As the saying goes, the best time to get your estate planning affairs in order is … right now.
Combined with the confronting statistic that an estimated 40% of Australians do not have a will at all, to be effective, a modern will often needs to deal with matters not historically covered by “simple wills” such as superannuation and life insurance proceeds, business assets, certain shares in private companies and family trusts.
If you consider that your personal or business affairs may involve one or more of these issues, you should seek legal advice on the benefits that may be gained from using a testamentary trust in your will so that your beneficiaries are shielded as much as possible from such life events such as divorce, bankruptcy and other disabilities. In simple terms, a testamentary trust is a trust established by a will, and may be optional (whereby the beneficiary can choose not to use it), discretionary (to decide who will benefit), a fixed trust or a combination or these types.
You may have heard that testamentary trusts are becoming increasingly popular in modern wills due to the taxation and asset protection advantages they can offer by comparison to a simple, old-fashioned will, for example by reducing personal income tax by splitting income from any inherited investments between a range of family members on lower tax rates.
Whilst a simple will may continue to be sufficient for some people, it is likely that a testamentary trust can offer your beneficiaries more flexibility in dealing with their inheritance depending on their own needs and financial circumstances at the time of your passing. Of course, the trust may also be drafted so that the beneficiary does not need to use the trust at all, if they choose not to do so.
If we can assist you in relation to the preparation of your wills, powers of attorney, appointing enduring guardians or estate planning generally, please telephone Emma Irvine or email email@example.com.