Tuesday, October 13, 2015

When will a multiple 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 multiple testamentary trust be preferred?’ at the following link - https://youtu.be/JXOrmklYY8Y

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

Interestingly, the reasons supporting use of multiple trusts are almost a mirror image to those supporting a single trust. The practical reasons include where the underlying beneficiaries are all adults, spread all over the world, or simply don’t get on. For any of these reasons it would often be impractical to lock them inside one structure.

Similarly, if there are different risk profiles or investment objectives for each of the underlying main beneficiaries, that would be another reason that a multiple trust would be preferable.

Again, what the underlying assets of the estate are can also be a big driver towards supporting use of multiple testamentary trusts.

For example, if there are particular assets that need to go into direct control of particular beneficiaries, then again the multiple trust structure will be the preferred approach.

Multiple trusts can be of particular use where there is a need to have different control mechanisms in relation to different components of the estate.

This can be particularly relevant to people who are concerned about the mental stability of a beneficiary or a beneficiary has a physical disability, then this in itself can be a driver to regulate part of the estate in a certain way through a testamentary trust and then have a separate trust to manage other parts of the wealth.