The Benefits of Testamentary Trust Wills Explained
September 9, 2025
Testamentary Trust Wills provide significant benefits for individuals and families planning the distribution of their estates in Western Australia, particularly in terms of asset protection, tax efficiency, and supporting vulnerable beneficiaries. These trusts are established within a Will and become effective upon death, offering tailored advantages for diverse family circumstances.
Key Benefits of Testamentary Trust Wills
Asset Protection
- Safeguards inheritance from creditors, bankruptcy, and family law disputes by holding assets within a trust rather than direct ownership by beneficiaries.
- Shields assets from potential misuse or waste by beneficiaries with high-risk behaviours such as gambling, financial instability, or poor money management.
- Protects funds from being included in divorce settlements, ensuring they remain accessible only to intended family members.
Tax Advantages
- Optimises tax outcomes by enabling income splitting among beneficiaries, especially those on lower marginal tax rates.
- Allows income distributed to minor children (under 18) via a testamentary trust to receive the full adult tax-free threshold (around $19,000–$22,000 per child annually, tax-free), compared to only about $500 in a standard family trust.
- Provides flexibility to defer tax liabilities for overseas beneficiaries by controlling the timing and distribution of income.
Support for Vulnerable and Young Beneficiaries
- Helps ensure responsible use of inherited assets by enabling trustees to set age thresholds (e.g., 21, 25, or older) for the release of funds to younger beneficiaries.
- Allows creation of specialised trusts for beneficiaries living with disabilities, including Social Security Act 1991 (Cth) compliant Special Disability Trusts.
- Can provide long-term security for those who require ongoing support, such as family members with health challenges or special needs.
Estate Planning Flexibility
- Highly customisable trusts can be tailored for one person, an entire family, or multiple generations, addressing complex family or blended family situations.
- Enables control over how and when assets are distributed, including restricting access to certain beneficiaries or protecting inheritance lines within families.
- Trustees are chosen to ensure accountability, oversight, and alignment with the intentions of the Will-maker, often with recommendations for two trustees to reduce risks.
Who Should Consider a Testamentary Trust Will?
- Individuals leaving substantial estates (often $2,000,000 or more) including superannuation or life insurance.
- Estates intended to support minor children, vulnerable adults, or those likely to face relationship or financial risks.
- Families wishing to maximise tax savings and asset protection across generations.
Crabtree Legal: Expert Guidance for Your Estate Plan
Crabtree Legal offers tailored advice on testamentary trust Wills to protect your legacy and secure your family’s future. Whether you need a simple Will or a complex estate plan, we support business owners, families, and individuals through every stage of estate planning, succession, and trust creation.
Feel free to contact Crabtree Legal for a personalised consultation to explore how a testamentary trust Will could benefit your unique situation.
A person's Will in Western Australia is generally revoked by marriage or divorce, unless it's made with their specific intention to marry or divorce clearly stated in the Will (or there is other evidence which establishes this intention). What Happens If You Get Married Under section 14 of the Wills Act 1970 (WA), marriage automatically invalidates your existing Will, unless your Will expressly states it was made "in contemplation of marriage" to your intended spouse. If your Will is invalid and you pass away, your assets will be divided according to WA's intestacy laws, which may not reflect your wishes. The best practice is to obtain a new Will after marriage to ensure all your assets and intentions for your loved ones are protected. What Happens If You Get Divorced Section 14A of the Wills Act 1970 (WA) outlines that divorce also cancels your Will unless your Will shows a clear intent for it to remain valid after divorce. Practically speaking, the automatic revocation in section 14A makes sense, as it is unlikely that you would still want to appoint your former spouse as the Executor of your Will, or provide for them from your estate, after you have divorced. However, if you do not update your Will after divorce, there may be unintended consequences, such as assets going to your ex-spouse or confusion and disputes among family members. Why Updating Your Will Matters Failing to update your Will after marriage or divorce can lead to estate mismanagement, litigation, or your wishes not being honored. If your relationship status has changed, make an appointment to create or update your Will so all provisions accurately reflect your current wishes and protect your loved ones. This is especially important for blended families, business succession planning, and unique asset structures. Get A Will That Reflects Your Changed Circumstances At Crabtree Legal, a veteran-owned and operated law firm in Perth, we pride ourselves on delivering expert, practical advice and drafting for Wills, estate, and succession matters. If you or anyone you know has recently married or divorced, please refer them to us—it may be time to get a new Will to ensure their wishes and family's future are protected.
Nominating legal guardians for minor children in a Will is a critical act for every parent, providing clarity and security for children should the unimaginable occur. Without clear instructions, the law dictates who may look after minor children, often leading to uncertainty, potential family disputes, and complex legal proceedings. Why Appoint Legal Guardians in Your Will Putting a nomination for legal guardianship in your Will ensures that trusted people—whose values, beliefs, and care align with your wishes—can support and protect your children if both parents pass away. This appointment is a proactive step, sparing children from needless disruption and emotional harm during an already traumatic period. It also guides family and courts, minimising delays and potential disagreements. Who May Look After Children Without a Named Guardian If neither parent has nominated a legal guardian in their Will, Western Australian law applies. Usually, the closest surviving relatives, such as grandparents, aunts, uncles, or older siblings (if they are adults), might step forward to care for the children. However, these individuals do not gain automatic legal guardianship. Often, more than one person may seek this role, leading to possible disputes and, in some cases, involvement by the Department of Communities (Child Protection) if no suitable family members exist or agree. Legal Steps to Obtain Guardianship in WA Application to the Court : if a suitable person wishes to become a minor’s guardian, they must apply to the Court. Assessment by the Court : the Court will consider the child’s welfare and best interests above all else, assessing the applicant’s capacity, relationship with the child, and any competing claims from other relatives or interested parties. Possible Departmental Involvement : if no clear family candidate exists, or if there are concerns about the candidates, the Department of Communities may become involved, and the child may be placed in State care, at least temporarily. The absence of a Will nomination can lead to delays, uncertainty, and the risk that decisions are made by those unfamiliar with the family’s wishes. The surest path is to name trusted guardians in your Will, providing certainty for your children’s future care and stability. For tailored, practical succession planning advice—including the nomination of legal guardians—please contact Crabtree Legal.
Making a Will is the best way to ensure your assets and wishes are respected after your passing. But what happens if you die without a Will in Western Australia? The law refers to this situation as “dying intestate”, and your Estate will be distributed according to strict rules set out by the Administration Act 1903 (WA) , specifically section 14. This can have unexpected consequences for your loved ones, and may not reflect your wishes. How Is Your Estate Distributed Under Section 14 of the Administration Act 1903 (WA)? When someone passes away without a valid Will in WA, their estate is distributed to eligible relatives in strict proportions prescribed by law. The following summarises how assets are distributed, depending on which family members survive you: Spouse/de facto partner only = all to spouse/de facto partner. Spouse/de facto and child(ren) of both = $546,000 ( as at 5 July 2025 ) plus one-third to spouse; remaining two-thirds equally between children. Spouse/de facto and child(ren) (not all shared) = $546,000 ( as at 5 July 2025 ) plus one-third to spouse; remaining two-thirds equally between children (including any from other relationships). Spouse/de facto and no children, but parents and siblings (or nieces and nephews) = $815,500 ( as at 5 July 2025 ) plus half to spouse; with the remaining half a first amount of $65,500 ( as at 5 July 2025 ) to the parents and the rest equally between parents and siblings (or nieces and nephews). Children and no spouse/de facto = all equally among children. No spouse, no children, but parents only = all to parents. No spouse, no children, but parents and siblings (or nieces and nephews) = first amount of $65,500 ( as at 5 July 2025 ) to the parents and the rest equally between parents and siblings (or nieces and nephews). No spouse, no children, no parents, but siblings (or nieces and nephews) only = all equally to siblings (or nieces and nephews). No spouse, no children, no parents, no siblings, but grandparents = all equally among grandparents. No spouse, no children, no parents, no siblings, no grandparents, but aunts and uncles (or cousins) = all equally among aunts and uncles (or cousins). No eligible relatives = your Estate goes to the State of Western Australia. Why Is Intestacy Often a Problem? If you die without a valid Will, you lose control over who receives your assets. For example: Your spouse might have to share your Estate with children from another relationship, causing stress and uncertainty. Children, parents or siblings might inherit more (or less) than you intended. People you care about may miss out completely—such as stepchildren, friends, or charities. Disputes and delays are far more likely. Secure Your Legacy—Plan Ahead If the default rules above are not what you want for your loved ones, the best solution is to prepare a legally valid Will that reflects your wishes. Contact Crabtree Legal Today As a veteran owned and operated law firm based in Perth, WA, Crabtree Legal is ready to help you: Draft a Will tailored to your unique circumstances. Advise on Estate Planning, including Superannuation and Trusts. Create Powers of Attorney and Guardianship documents.