What are the benefits of a Testamentary Trust?
The three significant benefits of setting up a Testamentary Trust are as follows: • Taxation. A person under 18 who is a beneficiary of a Testamentary Trust will be treated, for income tax purposes, as a normal taxpayer. That means that a person under 18 can receive the tax-free threshold amount as provided for under the Tax Act. This is in contrast to a child under the age of 18 who is the beneficiary of a Trust created during your lifetime in which case, distributions of income to such a child under such a Trust are heavily taxed for any distribution exceeding $772.00 per annum. There is also the benefit of being able to distribute income to beneficiaries of the Trust who are, during the financial year, receiving a low income, and, therefore, pay less tax as the recipient of income from the Trust. For instance, if a beneficiary is unemployed or currently out of employment (for instance, staying at home to look after the family) then a distribution of income to that beneficiary would
