A testamentary trust is simply a trust set up in your Will that provides asset protection and taxation advantages. The trust is the vehicle that holds the assets for the benefit of the beneficiaries.
Testamentary trusts also offer fantastic tax flexibility. In essence, trusts are flow-through vehicles for tax purposes, which means the income earned each year from investing the trust assets always needs to be distributed out to beneficiaries, and each beneficiary gets taxed on the income they received from the trust at their own marginal tax rate.
