Tuesday, September 29, 2015

When will a single testamentary trust be preferred?

As set out in earlier posts, and with thanks to the Television Education Network, today’s post addresses the issue of ‘When will a single testamentary trust be preferred?’ at the following link - https://www.youtube.com/watch?v=-tI21UwLNnw

For ease of reference, earlier posts addressing similar issues are at the following links -



As usual, a transcript of the presentation for those that cannot (or choose not) to view the presentation is below –

The issues around the appropriateness of a single testamentary trust structure are really driven by the practicalities and the exact factual framework that a particular client finds themselves in.

The obvious one and the most common scenario would be where the family is quite young (for example), all children who are beneficiaries are under the age of 18. Another of the reasons is if asset protection is a core goal.

Generally, the conservative view is that using one trust, as opposed to multiple trusts, will provide a stronger level of asset protection.

Other issues include where the overall framework of the people making the estate plan is one where they want to see the beneficiaries more as a custodian of wealth, as opposed to being a direct recipient.

Probably the last main example would be where the underlying assets don’t lend themselves to a structure, other than being inside a single testamentary trust. A classic example would be a business interest or a large property holding. In this type of scenario, it's normally the case that a single trust would be preferred, as opposed to a multiple testamentary trust structure.