Investopoly Ep 374: Testamentary trusts and other estate planning strategies
In this episode, Stuart delves into the practical benefits and strategic importance of including a testamentary trust in your will. He explains how testamentary trusts offer powerful advantages in terms of tax efficiency, asset protection, and long-term flexibility, especially for families with minor children or complex financial situations. Stuart breaks down why income distributed to minors from a testamentary trust qualifies for adult tax rates, how these trusts can shield inheritances from relationship breakdowns or poor financial decisions, and why quarantining estate capital helps preserve tax concessions.
He also explores real-life scenarios where testamentary trusts can be useful, such as supporting at-risk beneficiaries, funding intergenerational education, or managing inheritance within large families. Stuart discusses structuring loans from the trust to beneficiaries, how to handle control of trusts and companies in estate planning, and the importance of aligning your superannuation nominations with your broader inheritance strategy.
For those curious about superannuation death benefit taxes, Stuart previews Campbell Wallace’s upcoming podcast and blog that will explore how to reduce or avoid the so-called “super inheritance tax.” Whether you’re updating your own will or helping your parents structure theirs, this episode is a must-listen for anyone aiming to build a thoughtful, tax-smart estate plan.
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IMPORTANT: This podcast provides general information about finance, taxes, and credit. This means that the content does not consider your specific objectives, financial situation, or needs. It is crucial for you to assess whether the information is suitable for your circumstances before taking any actions based on it. If you find yourself uncertain about the relevance or your specific needs, it is advisable to seek advice from a licensed and trustworthy professional.