WHAT KIND OF WILL IS RIGHT FOR YOU?

There are many types of Wills such as Simple Wills, Mutual Wills, Complex Wills and Testamentary Trust Wills.

SIMPLE WILL

The Simple Will is a testamentary instrument which expresses the Testator’s (Willmaker’s) choice of executors, beneficiaries and guardians, their wishes regarding funeral and burial and the distribution of their estate. The Simple Will also provides for specific gifts that the Testator wishes to give to beneficiaries including, for example, property, money, shares, heirlooms, or items of significance. The Simple Will does not provide any tax benefit or asset protection; capital gains tax may be payable on inherited property, and any inherited assets will not be protected where a beneficiary is sued.

True to its name, the Simple Will provides a relatively quick and easy way for a Testator to provide for the distribution of their estate and payment of debts upon their passing. This option may be most attractive to a Testator with a relatively small or less complex estate, or where there are no dependent children.

TESTEMENTARY TRUST WILL

The Testamentary Trust Will expresses the Testator’s choices and wishes in the same way a Simple Will does; however, the Testamentary Trust Will allows for control over how, and when, the estate is distributed to beneficiaries. The Testamentary Trust Will is most attractive to a Testator with a large or more complex estate, and in cases where the Testator has dependent children, or adult beneficiaries whom the Testator is concerned about in the event of a large and immediate inheritance.

The tax treatment of beneficiary children is a major benefit of the Testamentary Trust Will. Subject to anti-avoidance rules, income distributions of a trust estate to underaged dependent children that resulted from a Will are afforded the tax-free threshold of $18,200 and taxed at 19% marginal rate thereafter. A benefit is that surviving spouses or guardians may provide for untaxed education and maintenance of beneficiary children.

A further attractive feature of a Testamentary Trust Will is that assets of the estate, which form part of a trust, are owned by the trust and not considered those of the beneficiary. Where beneficiaries are at risk in business or professional pursuits, the assets may be protected in bankruptcy proceedings or where a beneficiary is sued in the person. In some instances, where a beneficiary is not a trustee of the trust and the trustee is completely independent, the assets of the trust may also be protected from family law claims against the beneficiary.

Though the Testamentary Trust Will may seem complex and sophisticated, its functions offer much more control for a Testator.

Should you require further information regarding what type of Will is right for you please contact Catherine Wallace of our office at catherine@wallaceweir.com.au; or or by calling 1300 011 123.

Please note that this article is written as an informative piece and that you must not take the contents of this article as legal advice. Wallace Law Group accepts no liability from your reliance on this article.