Testamentary Trust

A testamentary trust is built into your Will and springs into life only when you die and the Will takes effect. Instead of handing an inheritance directly to a beneficiary, the assets are held by a trustee who manages and distributes them under the terms you set. This is one of the most powerful estate-planning tools available, offering asset protection, control over timing, and significant tax advantages for children and other beneficiaries.

Testamentary trusts are commonly used to protect inheritances from a beneficiary's bankruptcy or divorce, to provide for minor children, and to split income tax-effectively among family members. Example: Maria's Will creates a testamentary trust so her young children's share is invested and used for their education until they are old enough to manage it themselves. A key tax benefit is that income distributed to minors from such a trust is generally taxed at adult marginal rates, not penalty rates.