Guardianship & Testamentary Trusts

A testamentary trust is a trust established by the Will and does not come into effect until after the will maker’s death. Testamentary trusts are commonly used for tax minimisation and asset protection for the beneficiaries.

The trust is designed to hold some or all of the estate assets for the benefit of the beneficiaries until such time is stipulated in the trust to distribute the assets.

Assets owned by a testamentary trust are held by the trustee and are not owned by the beneficiary personally. This provides a level of protection to the beneficiary in the event of bankruptcy or relationship breakdown. A trust can also legally protect the inheritance from potential squandering or mismanagement by the beneficiary.

If you have young children you should consider appointing a person in your Will to be the guardian of your children in the unlikely event that both parents die. This person is called the “testamentary guardian”. Although a guardian may be appointed in the Will, this is not binding.  The family court has the discretion to override and appoint a different guardian where it considers to be in your child’s best interest.

A guardian becomes responsible for the child’s daily and long term care, welfare and making lifestyle decisions until the child reaches the age of 18 yrs. The guardianship of minor children is a highly responsible task and the appointment should be thought through carefully.

The guardian is however, not responsible or have any power regarding the assets of the Will, the trustee appointed by the Will has this responsibility. Due to the separation of duties by trustee and guardian it is important that the trustee and guardian are able to communicate and work easily together in the best interest of your children.

We provide referrals to lawyers who can provide more specialised advice and prepare documents at a reasonable price.