What is a Testamentary Trust and what is a Discretionary Testamentary Trust?

A testamentary trust is a trust established in a person’s Will. It comes into existence only when the person dies and the Will comes into operation.

A testamentary trust is established when the Will states that an asset or share of the estate must be held on trust for a particular beneficiary (often depending on whether or not they attain a particular age), or for a range of beneficiaries.

If the asset or share of the estate is held on trust for a range of beneficiaries and the trustee has the discretion to choose which of those beneficiaries will receive the capital and/or income of the trust during the life of that trust, that type of trust is usually referred to as a “discretionary testamentary trust”.

Contact us for further information about the pros and cons of discretionary testamentary trusts.

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Disclaimer: This post contains information of a general nature only and is not intended to be used as advice in relation to a specific matter. Although every care has been taken in preparing the document, it may not be accurate or complete, particularly in the context of specific circumstances. MJM Lawyers disclaims responsibility for any errors or omissions.