A Matter of Trusts
Testamentary discretionary trusts can still be an effective estate planning tool for global families when carefully structured, with consideration given to residency of beneficiaries, control and tax treatment across jurisdictions.
Testamentary discretionary trusts (TDTs) are often used as an effective multi-generational succession, asset protection and taxation strategy, but how do they shape up in the global estate plan? With Australian families now experiencing an increase in the number of children and grandchildren residing abroad, this adds a level of complexity to estate planning. As all foreign jurisdictions will have differing treatment in respect of Australian trusts and how they are assessed for tax purposes, the relevant jurisdiction of the potential beneficiary will be a key factor in determining whether a TDT is appropriate in the circumstances and the key factors to be considered when drafting the TDT or administering the estate.
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