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The life estate and testamentary discretionary trust in modern wills

Published on 01 Aug 12 by "THE TAX SPECIALIST" JOURNAL ARTICLE

An important early step in structuring an estate plan is to decide who is to benefit from each of the assets and to what extent. Next, it is necessary to consider the form of ownership and control of the assets.

The introduction of the capital gains tax, and the uncertainty of the tax treatment of life estates under those provisions, together with changing attitudes to the methods of control and forms of ownership of assets, has led to a shift in estate planning away from the use of life interests or testamentary trusts with specific equitable life and reversionary interests. This article examines some of the issues to be considered by an estate planner when considering the use of life estates and whether life estates still have a role in the modern will.

The article then considers some general issues relating to testamentary trusts.

Author profiles

Kevin Munro CTA
Kevin Munro is a solicitor and principal of Munro Lawyers. He has 40 years’ experience in tax and superannuation, forming his own firm, Munro Lawyers (initially called Kevin Munro & Associates) in 1994. Kevin provides advice to clients, particularly professional firms and their clients, in respect of tax planning, superannuation, estate planning and wills, and he regularly acts as a consultant for other professional firms. Kevin is active in professional education and gives lectures and workshops for various professional organisations. He was a member of the NSW Law Society’s Advisory Committee for Small Business Accreditation. Kevin is a Certified Tax Practitioner of the Tax Institute and a fellow of the Society of Trustees and Estate Planners. Kevin also holds a Masters Degree in Commerce, a Bachelors Degree in Agricultural Economics and Diploma of Law, and is a 1979 Churchill Fellow. - Current at 21 July 2017
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Emma Munro
Emma Munro is a Senior Lawyer at Munro Lawyers. - Current at 03 September 2012
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