How Does a Testamentary Trust Work?
A Testamentary Trust is created by your Will and only takes effect on your death. The Trustee has discretion to distribute income and capital amongst your family Beneficiaries according to the directions in your Will. A Testamentary Trust gives your family both flexibility and control over when and how they receive their inheritance. Depending on your Will, the Trustee may distribute the income or capital to Beneficiaries at various times and in differing proportions. The Testamentary Trust can be wound up at any time, or kept open for an extended period. Because the Trust Assets are not legally owned by your Beneficiaries, but rather by the Trustee, they are protected in situations such as legal proceedings, bankruptcy or marital breakdown.
