06 December 2014
If a couple with three children own several properties, how much would the equity in their properties need to be worth to justify the tax/cost savings from including discretionary testamentary trusts for each child in their wills?
There is no amount that triggers the decision to create a testamentary discretionary trust.
There are practitioners that are of the view that all wills should do so because they provide the maximum potential flexibility, asset protection, and tax advantage.
Others take the view that most beneficiaries want their inheritance for themselves without the complexity of an interposed trust.
If the children were adults with children of their own the potential tax advantages are significant as each grandchild can receive income taxed at normal marginal rates with a tax free threshold presently $18,200.
As clients' affairs change over time it is impossible to know at the time of making their will whether a trust is a good idea.
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