Tax Effective 3-Generation Testamentary Trust Mutual Wills


You are building two Tax Effective Mutual Wills. They each contain a 3-Generation Testamentary Trust. In the first instance, you leave everything to each other. After you both die, you leave everything to the same beneficiaries.

Not leaving everything to each other? Then build two separate single Wills instead.

And to the tax man I leave...

Every year, Australian taxpayers voluntarily pay the government millions of dollars in 'death taxes'. The 4 defacto death duties are:

  1. Capital Gains Tax
  2. Stamp Duty
  3. Income tax
  4. up to 32% in non-dependency Superannuation tax

Are you going to be one of them? Proper Estate Planning ensures that your estate goes to those you care about. Not the Tax Man.

3-Generation Testamentary Trusts

Professor Brett Davies invented Testamentary Trusts in 1994. In 1997 he then invented the 3-Generation Testamentary Trust. The 3-Generation Testamentary Trusts' additional advantages include:Testamentary Trust

  1. better tax advantages
  2. generally, pay no tax on the estate income for 80 years
  3. works for three generations: spouse, children and grandchildren
  4. discretionary of nature: a beneficiary can choose not to set up any trusts
  5. wound up when no longer required
  6. each beneficiary gets their own 3-Generation Testamentary Trust
  7. the children when acting unanimously can divide up the class of assets differently. Say you have $1m in shares, $1m in property and $1m in cash. One of your children can take all of the shares. The other the property. The remaining child takes the cash. There is no CGT and stamp duty.
Testamentary Trust

Talk to your Accountant and Adviser about leaving what you own to your family. Not the ATO.

32% Tax on Super - Superannuation Testamentary Trust

After you and your spouse die your adult children pay 17% or 32% on your Super.  That is a non-dependancy tax. It is on your concessional superannuation. Our Super Testamentary Trust, which you get in these two Wills seeks to reduce this tax to zero.

You are building two Testamentary Trust Mutual Wills. They are tax effective:

  1. 3-Generation Testamentary Trusts
  2. Super Testamentary Trust - to reduce the 17% or 32% tax on Super going to adult children
  3. Bankruptcy Trusts - if a beneficiary is bankrupt
  4. Maintenance Trust - where beneficiaries under 18 years of age or unstable








For legal advice telephone us. We are a law firm. We can help you answer the questions as you build your Will.

Adjunct Professor, Dr Brett Davies, CTA, AIAMA, BJuris, LLB, LLM, MBA, SJDNSW Power of Attorney NSW POA NSW EPA New South Wales POA New South Wales enduring poa NSW Enduring POA
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