A simple will may be cheaper but it is most certainly not going to provide the most tax effective solutions for beneficiaries.
And, a simple will is definitely not suitable for a person who has a business or owns a couple of properties or has a portfolio of shares or other investments.
A person with the same or similar asset base should rather consider getting a will with a testamentary trust. A testamentary trust is a way of giving your assets to your beneficiaries without the risk of creditors having access to the estate.
A will with a testamentary trust offers a number of benefits:
No CGT payable on transfer of assets to the next generation: The assets held in a testamentary trust can pass to children and then grandchildren without paying capital gains tax.
Beneficiaries under 18 years are not taxed at the penalty rates like a normal Family Trust: The income of the Testamentary Trust is ‘excepted’ and therefore minors are taxed at normal adult rates.
Asset protection from creditors: The beneficiaries do not own the assets of Trust in their personal capacity and therefore are not open to attack by potential creditors.
Assets are protected from any beneficiary becoming bankrupt: If any beneficiary becomes bankrupt after the death of the Willmaker, the assets in the Trust are not available to a Trustee in bankruptcy.
Spend thrifty beneficiaries cannot squander the assets in the Trust: Since the beneficiaries do not own the assets in their personal capacity, they are not able to sell any of the assets off in a ‘dash for cash spending spree’.
The benefits to your family that are available in a testamentary trust, far out weigh the cost of getting the will prepared.
Talk to us about our pricing for a will with a testamentary trust. You will be quite surprised!