Why use a Testamentary Trust?
A testamentary trust offers three advantages compared with ownership passing directly to a beneficiary. 1. Asset Protection As with an inter vivos discretionary trust because a discretionary object has no interest in a particular asset until the trustee exercises his discretion in favor of that object, it follows that a creditor of that particular discretionary object can have no recourse to the assets of the trust unless the trustee of the trust specifically gives the discretionary object an interest in the asset of the trust by either distributing the asset to the discretionary object, or by resolving to distribute that asset to the discretionary object. Compare this with the position where the discretionary object is given a gift outright under the will: the creditors of the discretionary object can have recourse to that asset.
