Control

The trustee of a discretionary trust generally has complete discretion to determine who receives the income of the trust.

Cost and complexity

Testamentary trusts have costs such as legal fees to establish and transfer assets to the trust and accountant fees for tax returns, though these are usually outweighed by the benefits of the trust.

It may be less tax effective to pay superannuation into a testamentary trust

Superannuation benefits paid to a ‘dependant’ is usually tax free, but if any of the beneficiaries of the trust are not ‘death benefit dependants’ the benefits may be taxable.

Asset protection is not absolute

However, it is often the best strategy available.

For tailored advice on how testamentary trusts can be used in your estate plan, contact us for an estate planning consultation.