Tuesday, February 28, 2017

Post death testamentary trusts

View Blog Post death testamentary trusts by Matthew Burgess

Previous posts have touched on various forms of testamentary discretionary trusts, including 'post death' testamentary discretionary trusts http://blog.viewlegal.com.au/2010/05/testamentary-trusts-is-it-ever-too-late.html.

In very broad terms, these trusts are created so as to provide a pathway to access the excepted trust income rules under the Tax Act. In particular, they allow income to be distributed at adult rates to children under the age of 18.

While there are a number of rules that need to be complied with before setting up a post death testamentary trust, it is worth remembering that the structure is in fact available in a variety of circumstances, including:

  1. Where the deceased dies with assets in their own name and a basic will (i.e. not incorporating a testamentary trust);
  2. Where the deceased dies with assets in their name and has no will (i.e. they are intestate);
  3. Where the deceased dies with superannuation entitlements (including insurance); or
  4. Where the deceased dies with insurance entitlements.

Importantly, this type of trust is also available where the parties to a marriage separate and there are child support obligations that need to be satisfied.

View’s 90 minute webinar exploring the key issues in relation to post death trusts is available here - https://viewlegal.com.au/product/recorded-webinar-package/

Extracts of the webinar are also available via our podcast channel, see - https://viewlegal.com.au/view-podcasts/

Image credit: Markus Spiske cc