Do you have a will? If so, are you aware there are ways of drafting a will that are more tax effective than others?
The simple will was adequate enough decades ago when tax systems were not as complicated and where laws allowing people to challenge wills, did not exist.
What are my options?
Put simply, there are two types of wills that people can choose from.
- Option 1 - a simple will
This option is generally produced using a will kit.
- Option 2 - a will with a Testamentary Trust
This option uses a Testamentary Trust which is established by a Will and comes into effect upon death of the Will maker. A carefully drafted Will establishing Testamentary Trusts can offer wide ranging benefits to the beneficiaries of your estate. Establishing testamentary trusts in your Will provides your beneficiaries with maximum flexibility in dealing with their inheritance.
The table below provides a comparison of both options:
| Simple will | Will with a Testamentary Trust | |
| Protection to beneficiaries on relationship breakdown. Keep your estate in the family. |
No | Yes |
| Protection to beneficiaries from losing inheritance to creditors or bankruptcy. |
No | Yes |
| Beneficiaries saving income tax and capital gains tax. | No | Yes |
| Protection of inheritance for immature/young beneficiaries or vulnerable beneficiaries |
No | Yes |
We all have different family circumstances, therefore a one size fits all approach may not result in the best outcome for you and your family. Give yourself some peace of mind by contacting our John Mujic on 1300 795 515 or email jmujic@prosperity.com.au for an obligation free discussion.