Passing on is an unfortunate, yet inevitable final stage in the circle of life.
Yet, a testamentary trust as part of estate planning is one small but mighty plan you could put in place, to alleviate potential and further stress for loved ones left behind.
What is involved in estate planning, testamentary trusts? What are their advantages and how can one be written and implemented?
Read more from Crest Accountants to find out.
The purpose of testamentary trusts
Legally and thoughtfully managing a person’s assets after they pass away; this is the purpose of a testamentary trust, which is created in a will.
Separate to a deceased estate, a testamentary trust is a trust established under a valid will. It functions similarly to a discretionary family trust.
The trustee of a testamentary trust will:
- Understand the tax profile of beneficiaries and intended tax outcomes,
- Lodge a tax return for the testamentary trust for every financial year that it exists,
- Maintain proper trust account records, such as detailed financial statements, reconciliation and trustee resolutions, particularly where the trustee is streaming franked dividends or capital gains.
- Document capital gains tax events, cost bases, roll overs or other concessions claimed.
Formulating a testamentary trust with a Gold Coast Accountant may just be the best thing you ever do for your loved ones.
The use of testamentary trusts
The terms of each testamentary trust will be different, based upon the will of the deceased person.
Here’s the common usage and functions of a testamentary trust:
- The trustee usually has discretion over the distribution of capital and income, and
- A well-managed testamentary trust ensures tax outcomes are realised and legal disputes and/or family issues may be prevented.
Having a will and testamentary trust is well and good, but how it’s implemented is of greatest importance to ensure last wishes and estate planning are met.
The advantages of a testamentary trust with a Gold Coast Accountant
A Gold Coast Accountant who specialises in estate planning will guide you through testamentary trusts and provide the peace of mind you so desire.
The advantages of a testamentary trust are as follows:
- Asset protection,
- Correct distribution of income and capital (this includes infant beneficiaries), and
- Providing for several generations.
The beneficiaries of a testamentary trust may be vast, but implementing the trust with a Gold Coast Accountant ensures there’s a high level of flexibility to ease stress and have everything in place.
Estate planning and testamentary trusts aren’t solely for the elderly or wealthy.
Life throws unfortunate and unexpected curveballs at us all, but estate planning ensures our loved ones are set up in the event of our passing.
Planning for the future ensures you can focus on building your career, spend quality time with family and creating a positive and fulfilling life for yourself.
Crest Accountants understand estate planning for every stage of life.
Need help with estate planning and testamentary trusts?
Contact Crest Accountants today for simplified accounting solutions to bring you the peace of mind you deserve.