Header Image

Testamentary Trusts

Book Now
Book your no obligation consultation Book your free consultation

What is a Testamentary Trust?

A testamentary trust is a special type of trust established by a Will. It does not come into effect until after the death of the person making the Will, referred to as the “Testator”.

Upon the death of the Testator, the property and assets of the deceased estate that the Testator wishes to leave to the trust are transferred to a trustee who holds on trust for the benefit of the trust’s beneficiaries. Testamentary trusts have considerable taxation and other financial planning advantages compared to a discretionary (family) trust or an estate with no trust structure. The potential benefits of a testamentary trust are as follows:

Background Texture

Tax Treatment

Current taxation legislation allows income from testamentary trusts to be treated as ‘excepted income’ for taxation purposes. This means that distributions to beneficiaries who are minors will receive the benefit of the tax-free threshold in certain circumstances.

Asset Protection

A testamentary trust may provide benefits in terms of asset protection where a beneficiary faces the prospect of bankruptcy and may be protected from creditors. Similarly, assets held within a testamentary may be protected in case of family law orders against a beneficiary.



Testamentary trusts offer Testators greater control and flexibility over the assets of the Estate, including how and when they are distributed, and essentially allows a Testator to rule from the grave.


Death Benefits

Death benefits are usually received as a “superannuation death benefit” or a “death benefit termination” benefit. These benefits are often received by the personal representative of the estate in their capacity as executor. Benefits a personal representative receives are treated as income to which no beneficiary is entitled and taxed accordingly. If a death benefit is received directly by a ‘death benefit dependant’ it is tax-free regardless of the payment size.

To maximise the tax treatment of death benefits, they should be paid directly to a ‘death benefit dependant’. Depending on the makeup of the beneficiaries, this may result in one beneficiary receiving a greater share of the estate assets. A testamentary trust may be helpful in this respect by allowing flexibility concerning the other estate assets and allowing an equal distribution while maximising the tax benefits of the death benefit.

Background Texture

How long does the Testamentary Trust last?

A testamentary trust can last for up to eighty (80) years! However, there will normally be a right for the trustee of the trust to terminate it on an earlier date, in which case all trust assets will be completely distributed to the beneficiaries.

Contact the Ramsden Commercial team for any Testamentary Trusts queries here.

Services you may be interested in

Do you have a question? We're here to help you find the answer.

Enquire Now

What Our Clients Say

"After many years as a client with Ramsden Lawyers, our family find them very professional at what they do. All the staff are very friendly and are committed in their work."

- Adrian Z. | Gold Coast

"We highly recommend Ramsden Lawyers for all Litigation, Construction or Property Services. They have assisted our company in reviewing Multi Million Dollar Construction Contracts as well as navigate through legal discussions with ease, professionalism and execution. We look forward to continuing our professional relationship with the team at Ramsden for years to come."

- G. C. Projects | Gold Coast

"Their professionalism was EXCELLENT. Made the whole property purchase paperwork a delight...not the stress filled minefield I was expecting. Clear, clever, succinct and a delight to deal with. Will definitely refer to all. Thanks Ramsden."

- Ellen G. | Gold Coast

"Excellent! Highly recommend. Received great service from family law team. They were very helpful, informative and professional."

- Karen M. | Sydney

"Amazing professionalism, attention to detail and compassion when working in the sensitive area of family law. I would highly recommend Ramsden Lawyers for any legal service."

- Mary B. | Gold Coast

"Anna, you’ve made this hard battle much easier for me because of the way you actually cared about what I was going through. Always very professional and patient. I'm really glad I’ve chosen you to fight the battle of my life and even gladder to say: WE WON! Thank you very much for everything."

- Gustavo D. | Gold Coast