When most people think about making a Will, they imagine a straightforward document that says who gets what when they die. For many Australians, that basic Will is all that is needed. But for others — particularly those with significant assets, complex family structures, or vulnerable beneficiaries — a Will that simply transfers wealth outright may not be the wisest choice.
Few estate planning tools are as misunderstood — or as valuable — as the testamentary trust. Many people assume that a Will simply divides assets among beneficiaries in a straightforward fashion. While a basic Will can certainly do that, a testamentary trust offers a far more sophisticated and protective arrangement, capable of shielding your legacy from creditors, relationship breakdowns, poor financial decisions, and excessive taxation.
This article explains what testamentary trusts are, how they work, and when they should be considered as part of your estate plan under the Succession Act 2023 (SA), which governs Wills and estate administration in South Australia from 1 January 2025.