How is this different to will making?

More wholistic consideration is given to the nature of your estate, your intended beneficiaries and steps that can be taken to maximise the after tax benefits of your beneficiaries.

The nature of your estate

It is often overlooked that assets held in family trusts, family companies or superannuation funds do not necessarily form part of your estate that is dealt with in accordance with your Will. Each of these assets and their structures, that have life after your death, must be separately considered to ensure that these assets benefit those you intend.

Succession for the family business

There are unique issues here that must be considered and particularly the ongoing control of the business if only some of your beneficiaries are involved in the business.

Testamentary Discretionary Trusts

The use of sophisticated trusts in your will can result in major after-tax benefit for your intended beneficiaries combined with significant asset protection advantages.

A "Testamentary Trust" is simply a trust established in your Will.

It has been common practise for many years for simple trusts to be established in a Will, for example monies held on trust for infant children until they reach a certain age.

Testamentary Discretionary Trusts (TDT's) are much more sophisticated, in that:

• A separate TDT can be established for each of your intended beneficiaries
• Each intended beneficiary is then placed in control of their own particular TDT, (which may only occur on them attaining a certain age)
• The beneficiaries of each TDT can be a potential broad category of people.

Example: You have three children and wish to create a TDT in your Will for each child.

Your Will provides that 1/3 of your estate is settled on each TDT. Each child (on attaining a certain age) would take control of their own TDT.

The first advantage here is that the property is not owned by the child personally but by the child on trust for that trust. First Advantage - asset protection. Each child has a broad group of people that they can choose to benefit from their TDT, including themselves, their spouse and their children.

Second Advantage - children are treated as adults for taxation purposes under this type of trust. Therefore income can be effectively split for potentially huge taxation benefits. Beneficiaries can be narrowly or broadly defined. It is usual that capital beneficiaries would include only those within your bloodline.

Third Advantage - protection of your estate for subsequent generations without being dragged into property settlement disputes on matrimonial breakdown. If a TDT interests you as part of your estate plan, we recommend that you speak with your lawyer about this.

Tip: Unless Asset protection for a beneficiary is a driver this is usually only warranted for larger estates, in our experience estates with a net value of $500,000.00+ to be settled on each Testamentary Discretionary Trust.

Self-Managed Superannuation Funds

We have often found that Self Managed Super Deeds require amendment in conjunction with will making to ensure that the next generation receives the maximum benefit..