Legal Glossary
Testamentary Trust
A trust created by a will that comes into existence on death, often used for asset protection and tax-effective distribution to beneficiaries.
A testamentary trust is a trust established by the terms of a will and only comes into existence when the will-maker dies. It can hold inherited assets for the benefit of a class of beneficiaries (for example, a spouse, children and grandchildren), and is commonly used to protect inheritances from family-law claims, creditors, or to access concessional tax treatment for income distributed to minor beneficiaries. The terms of the trust are set out in the will itself.
Related practice area
Wills & Estates