Testamentary Trust Will (Australia)
LAST WILL AND TESTAMENT — TESTAMENTARY TRUST WILL
I, [Testator Name], of [Testator Address], [Testator City], [Testator State] [Testator Postcode], being of legal age, of sound mind and memory, and not acting under duress or undue influence, do hereby make, publish, and declare this to be my Last Will and Testament incorporating a Testamentary Trust (this "Will").
1. REVOCATION OF PRIOR WILLS
1.1 I hereby revoke all former Wills, codicils, and testamentary instruments previously made by me.
2. APPOINTMENT OF EXECUTOR AND INITIAL TRUSTEE
2.1 I appoint [Executor Name], of [Executor Address], [Executor City], [Executor State] ("my Executor" and "initial Trustee"), to be the Executor and initial Trustee of this Will and of the Testamentary Trust established by this Will.
2.2 My Executor shall have full power and authority to administer my estate, including power to sell, lease, mortgage, or otherwise deal with any assets of my estate, to pay all debts and liabilities, to make all elections available under the Income Tax Assessment Act 1997 (Cth) and applicable state legislation, and to do all acts necessary for the proper administration and distribution of my estate.
2.3 Upon completion of estate administration, my Executor shall continue as the initial Trustee of the Testamentary Trust with all powers conferred by this Will and by the Trustee Act of [Testator State].
3. PAYMENT OF DEBTS AND EXPENSES
3.1 I direct my Executor to pay from my estate, as soon as practicable after my death, all my just debts, funeral and cremation expenses, and the costs and expenses of administering this estate, including any duty or tax payable by reason of my death.
4. TESTAMENTARY TRUST
4.1 DECLARATION OF TRUST: I direct my Executor to hold the Testamentary Trust Fund (as defined below) on trust (the "Testamentary Trust") in accordance with the provisions of this clause and to administer and distribute the Testamentary Trust Fund in accordance with those provisions.
4.2 TRUST FUND: The "Testamentary Trust Fund" means: [Trust Fund Description]. The Testamentary Trust Fund also includes all accretions to, investments of, and substitutions for such property from time to time.
4.3 PRIMARY BENEFICIARIES: The primary beneficiaries of the Testamentary Trust are: [Primary Beneficiaries].
4.4 GENERAL BENEFICIARY CLASS: The Trustee may also, at its absolute discretion, distribute income or capital of the Testamentary Trust Fund to any member of the following class ("the General Beneficiary Class"): [General Beneficiary Class].
4.5 DISCRETIONARY DISTRIBUTIONS: The Trustee shall, in each financial year, distribute the income of the Testamentary Trust Fund (or accumulate it, to the extent permitted by law) among such of the primary beneficiaries and/or members of the General Beneficiary Class as the Trustee determines in its absolute discretion, in such shares and proportions as the Trustee sees fit. The Trustee may also distribute capital from the Testamentary Trust Fund to any primary beneficiary or member of the General Beneficiary Class at any time and in such amounts as the Trustee determines in its absolute discretion.
4.6 INCOME TAX ADVANTAGES: The Trustee acknowledges that under the Income Tax Assessment Act 1997 (Cth) s.102AG, income distributed from a testamentary trust to minor beneficiaries is assessed at adult marginal tax rates rather than at the rates applicable to minors receiving income from inter vivos trusts. Accordingly, the Trustee shall use its discretion in making distributions in a manner that is consistent with the tax-effective administration of the trust while having regard to the needs and circumstances of each beneficiary.
4.7 CAPITAL GAINS TAX: The Trustee shall be entitled to make a capital gains tax (CGT) discount claim under Division 115 of the Income Tax Assessment Act 1997 (Cth) where the trust asset has been held for at least 12 months, and to stream capital gains and franked dividends to specific beneficiaries in accordance with Division 6E of the Income Tax Assessment Act 1936 (Cth) to the extent permitted by law.
4.8 TRUSTEE'S POWERS: In addition to any powers conferred by the Trustee Act of [Testator State], the Trustee shall have the following powers: (a) to invest trust property in any investment authorised by the applicable Trustee Act, applying the prudent person investment standard; (b) to borrow money and grant security over trust property; (c) to carry on any business forming part of the Testamentary Trust Fund; (d) to employ agents and professional advisers; (e) to apply income or capital for the maintenance, education, advancement, or benefit of any beneficiary; (f) to accumulate income during any period permitted by law; and (g) to do all other acts necessary for the proper administration of the Testamentary Trust.
4.9 TRUSTEE REMUNERATION: A Trustee who is a professional trustee or licensed trustee company shall be entitled to reasonable remuneration in accordance with their published fee schedule. An individual Trustee shall not be entitled to remuneration unless specifically authorised by the beneficiaries.
4.10 CHANGE OF TRUSTEE: The primary beneficiaries (or a majority of adult primary beneficiaries) may, by written notice, require the Trustee to retire and may appoint a new Trustee in accordance with the applicable Trustee Act.
5. VESTING DATE
5.1 Subject to any earlier vesting, the Testamentary Trust shall vest no later than 80 years from the date of my death (the perpetuity period applicable under the law of [Testator State]) (the "Vesting Date").
5.2 In relation to each primary beneficiary, the Trustee shall distribute that beneficiary's share of the Testamentary Trust Fund outright upon that beneficiary attaining [Vesting Age], or upon the Vesting Date, whichever is earlier. Additional vesting conditions: [Vesting Condition].
5.3 Upon the Vesting Date, the Trustee shall distribute the remaining Testamentary Trust Fund among the primary beneficiaries then living in equal shares absolutely, or if no primary beneficiary is then living, to such members of the General Beneficiary Class as the Trustee determines.
6. GENERAL PROVISIONS
6.1 Any beneficiary who predeceases me, or fails to survive me by 30 days, shall be treated as having predeceased me for all purposes of this Will.
6.2 References to 'children' in this Will include children born within marriage, ex-nuptial children, and children adopted by me, but do not include stepchildren unless specifically named.
6.3 The laws of [Testator State], Australia govern this Will and the Testamentary Trust. Any challenge to the validity of this Will shall be determined by the Supreme Court of [Testator State].
6.4 This Testamentary Trust Will has been prepared in contemplation of the tax provisions in the Income Tax Assessment Act 1997 (Cth) and Income Tax Assessment Act 1936 (Cth) as at the date of execution. The Trustee shall seek professional tax advice if there are any changes to those provisions that may affect the administration of the Testamentary Trust.
SIGNED, PUBLISHED, AND DECLARED
I, [Testator Name], sign this Testamentary Trust Will at [Execution Place] on [Execution Date] as my Last Will and Testament in the presence of the witnesses named below, both present at the same time, who at my request and in my presence and in the presence of each other have subscribed their names as witnesses.
TESTATOR
Full name: [Testator Name]
Address: [Testator Address], [Testator City], [Testator State] [Testator Postcode]
Signature: _______________________________
Date: [Execution Date]
WITNESS 1
Full name: [Witness 1 Name]
Address: [Witness 1 Address]
Signature: _______________________________
Date: [Execution Date]
Occupation: _______________________________
WITNESS 2
Full name: [Witness 2 Name]
Address: [Witness 2 Address]
Signature: _______________________________
Date: [Execution Date]
Occupation: _______________________________
Testator
________________
Signature
Date: ________________
Witness 1
________________
Signature
Date: ________________
Witness 2
________________
Signature
Date: ________________
What Is a Testamentary Trust Will (Australia)?
A Testamentary Trust Will in Australia directs how a person's property, money, and personal effects are distributed after death and names the executor responsible for administering the estate, with formal validity and execution governed by the Succession Act 2006 (NSW). It directs the distribution of the testator's estate to named beneficiaries upon death.
The defining feature of an Australian Testamentary Trust Will is the income tax advantage provided by section 102AG of the Income Tax Assessment Act 1997 (Cth). Under that provision, income distributed from a testamentary trust to minor beneficiaries (those under 18 years of age) is assessed at adult marginal tax rates rather than at the punitive rates that apply to minors receiving income from inter vivos trusts. For minors receiving trust income from an inter vivos trust, the effective tax rate can be as high as 66 cents in the dollar on amounts exceeding $416. Under a testamentary trust, however, the minor receives that income at the adult rates — potentially nil on the first $18,200, and 19% up to $45,000 — providing dramatic tax savings where distributions are made to minor beneficiaries.
A Testamentary Trust Will also provides significant capital gains tax advantages. The trust qualifies for the 50% CGT discount on assets held for more than 12 months under Division 115 of the Income Tax Assessment Act 1997 (Cth) — unlike a company, which cannot access the CGT discount. The Trustee may also stream capital gains and franked dividends to specific beneficiaries under Division 6E of the Income Tax Assessment Act 1936 (Cth), directing those amounts to beneficiaries who can best use them from a tax perspective.
A Testamentary Trust Will must be executed with the same formalities as any Will under the applicable state or territory Succession Act, including the requirement for two independent witnesses who are present simultaneously when the Testator signs.
The legal framework governing the Testamentary Trust Will (Australia) in Australia draws on several key statutes and regulatory bodies. Under state succession legislation — including the Succession Act 2006 (NSW), Wills Act 1997 (Vic), and Succession Act 1981 (Qld) — the Supreme Court of each state administers probate. The Trustee Act 1925 (NSW) and equivalent state Acts govern trustee obligations. The Australian Taxation Office (ATO) administers estate taxation. Section 7 of the Succession Act 2006 (NSW) sets formal requirements for valid wills. The Privacy Act 1988 (Cth) applies to personal data held by executors and administrators. Parties executing a Testamentary Trust Will (Australia) in Australia should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Succession Act 2006 (NSW) sets the foundational requirements.
When Do You Need a Testamentary Trust Will (Australia)?
A Testamentary Trust Will is particularly beneficial in a number of circumstances.
Families with minor children receive the greatest immediate benefit. Where estate assets are to be distributed among children who are under 18 at the time of the Testator's death, a testamentary trust enables the Trustee to distribute income each year at adult marginal tax rates, potentially saving tens of thousands of dollars in tax annually until each child reaches adulthood.
High-value estates benefit from the income-splitting flexibility a testamentary trust provides. A discretionary trust can distribute income among a wide class of family beneficiaries — children, grandchildren, spouses, and family trusts or companies in which they hold interests — allowing the Trustee to minimise the family's overall tax liability year by year.
Asset protection is a significant advantage for some families. Assets held in a testamentary trust are generally protected from the claims of a beneficiary's creditors (in the event of bankruptcy or insolvency), and from property settlement claims in family law proceedings. A beneficiary who receives assets outright may be vulnerable to losing them through divorce or financial difficulty — a testamentary trust provides a layer of protection.
Where beneficiaries include vulnerable adults — those with disability, mental illness, or a propensity for financial mismanagement — a testamentary trust allows the Trustee to manage assets for their benefit without those assets being directly controlled by the beneficiary.
Blended families may also use a testamentary trust to confirm that assets ultimately pass to the Testator's biological or adopted children, while allowing the surviving spouse to benefit from income and capital during their lifetime.
Parties in Australia should prepare a Testamentary Trust Will (Australia) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under state succession legislation — including the Succession Act 2006 (NSW), Wills Act 1997 (Vic), and Succession Act 1981 (Qld) — the Supreme Court of each state administers probate. The Trustee Act 1925 (NSW) and equivalent state Acts govern trustee obligations. The Australian Taxation Office (ATO) administers estate taxation. Section 7 of the Succession Act 2006 (NSW) sets formal requirements for valid wills. The Privacy Act 1988 (Cth) applies to personal data held by executors and administrators. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your Testamentary Trust Will (Australia)
A well-drafted Testamentary Trust Will contains several essential components.
The Executor and initial Trustee appointment is crucial. In most Testamentary Trust Wills, the Executor who administers the estate also becomes the initial Trustee of the testamentary trust once the estate has been administered. It is advisable to appoint an alternate Trustee in case the primary person cannot act.
The trust fund definition specifies which assets of the estate are to be held on the testamentary trust. Most commonly, the entire residuary estate is settled on the trust after payment of debts, expenses, and any specific bequests. The more assets in the trust fund, the greater the income-splitting and CGT advantages.
The primary beneficiary and general beneficiary class provisions define who can benefit from the trust. A wide class of beneficiaries — including children, grandchildren, spouses, and associated entities — maximises the income-splitting flexibility and the ability to adapt distributions to changing tax circumstances year by year.
The discretionary distribution clause is the heart of the trust. The Trustee has absolute discretion to distribute income and capital among the beneficiary class in such shares and proportions as the Trustee determines each year. This flexibility is the foundation of the income-splitting advantage.
The Trustee's powers clause should be thorough, including powers to invest, borrow, carry on business, employ agents, and accumulate income. These powers should be no less extensive than those conferred by the applicable state Trustee Act.
The vesting provisions set out when the trust ends. The trust must vest within the perpetuity period (generally 80 years), but most testamentary trusts are designed to wind up when the youngest primary beneficiary reaches a specified age.
The execution clause must strictly comply with the applicable state Succession Act, with two independent witnesses present simultaneously when the Testator signs.
Additional compliance elements for a Testamentary Trust Will (Australia) used in Australia include: Under state succession legislation — including the Succession Act 2006 (NSW), Wills Act 1997 (Vic), and Succession Act 1981 (Qld) — the Supreme Court of each state administers probate. The Trustee Act 1925 (NSW) and equivalent state Acts govern trustee obligations. The Australian Taxation Office (ATO) administers estate taxation. Section 7 of the Succession Act 2006 (NSW) sets formal requirements for valid wills. The Privacy Act 1988 (Cth) applies to personal data held by executors and administrators. Forms-legal.com provides this template as a starting point for Australia-compliant documentation.
Cite this page
Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Testamentary Trust Will (Australia) (Australia) [Legal document template]. Forms Legal. https://forms-legal.com/australia/estate-planning/estate/testamentary-trust-will-australia
"Testamentary Trust Will (Australia) (Australia)." Forms Legal, 2026, https://forms-legal.com/australia/estate-planning/estate/testamentary-trust-will-australia.
@misc{formslegal-testamentary-trust-will-australia,
author = {{Forms Legal}},
title = {Testamentary Trust Will (Australia) (Australia)},
year = {2026},
howpublished = {\url{https://forms-legal.com/australia/estate-planning/estate/testamentary-trust-will-australia}},
note = {Free legal document template. Based on Succession Act 2006 (NSW)}
}Also available for these jurisdictions:
Frequently Asked Questions
A testamentary trust Will is a Will that creates one or more trusts that come into existence upon the Testator's death, rather than distributing assets directly to beneficiaries outright. Unlike a standard Will which simply passes assets to named individuals, a testamentary trust Will establishes a discretionary trust over all or part of the estate, with a Trustee empowered to distribute income and capital among a class of beneficiaries at their discretion. The primary legal advantage in Australia is the income tax treatment under the Income Tax Assessment Act 1997 (Cth) s.102AG: income distributed from a testamentary trust to minor beneficiaries (under 18 years of age) is taxed at adult marginal tax rates, rather than at the punitive minor rates (up to 66%) that apply to trust income from living (inter vivos) trusts. This makes testamentary trusts particularly powerful for families with young children or grandchildren.
A testamentary trust provides several capital gains tax (CGT) advantages under the Income Tax Assessment Act 1997 (Cth). First, the trust qualifies for the 50% CGT discount on assets held for more than 12 months, just as an individual taxpayer would — unlike a company, which does not qualify for the CGT discount. Second, under Division 6E of the Income Tax Assessment Act 1936 (Cth), the Trustee may stream capital gains and franked dividends to specific beneficiaries who can make the best use of those amounts from a tax perspective (for example, a beneficiary with capital losses to offset a capital gain). Third, where inherited assets are sold, the trust may benefit from the deceased estate CGT concessions under Division 128 of the Income Tax Assessment Act 1997 (Cth), which in many cases means the cost base resets to market value at the date of death. Legal and tax advice should be obtained for specific estates.
The choice of Trustee for a testamentary trust is critical. Common choices include a surviving spouse, an adult child, a trusted friend, a professional trustee company (such as State Trustees in Victoria, Public Trustee Queensland, or a private trustee company licensed under the applicable Trustee Companies Act), or a combination of individual and corporate trustees. A corporate trustee provides professional management, continuity, and liability protection, but charges ongoing fees. An individual Trustee may be more flexible and responsive to family needs, but creates risks of conflict of interest where the Trustee is also a beneficiary. Many Testamentary Trust Wills appoint the surviving spouse as initial Trustee with provisions for the adult children to appoint a replacement Trustee at a specified age or milestone. Whoever is appointed, they must be capable of administering a discretionary trust and making distributions in accordance with the Will and applicable trust law.
Australian law limits the duration of a trust (other than a charitable trust) to the perpetuity period applicable in the relevant state. In most Australian states, including New South Wales, Victoria, and Queensland, the perpetuity period is 80 years from the date of the Testator's death. Accordingly, the trust must vest — that is, all assets must be distributed outright — no later than 80 years after the Testator's death. In practice, most testamentary trusts are designed to wind up much earlier, typically when the youngest primary beneficiary (for example, the youngest child or grandchild) attains a specified age such as 25 or 30 years, or when the primary beneficiary (for example, the surviving spouse) dies. The Will should specify the vesting date or vesting condition, with the 80-year perpetuity period as the longstop backstop.
Yes. A testamentary trust Will is significantly more complex than a standard Will and should be reviewed by an experienced estate planning solicitor. The trust provisions must comply with the applicable state Succession Act and Trustee Act, the income tax provisions in the Income Tax Assessment Act 1997 (Cth) and Income Tax Assessment Act 1936 (Cth), and the CGT provisions in Division 115 and Division 6E. A solicitor can also advise on how the testamentary trust interacts with your superannuation death benefit nominations, any family trusts you already operate, and the family provision (estate challenge) risk under applicable state legislation. The cost of professional review is typically modest relative to the potential tax savings and legal protection a well-drafted testamentary trust provides, particularly for estates with significant assets or minor beneficiaries.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
Found an error? Let us knowRelated Documents
You may also find these documents useful:
Last Will and Testament (Australia)
Create a Last Will and Testament for Australia. Appoints an executor, distributes assets, nominates guardians for children, and establishes testamentary trusts. Governed by state Succession Acts. Execution requires two adult witnesses who are not beneficiaries.
Codicil to Will — Last (Australia)
Create a Codicil to amend an existing Will in Australia. Add, change, or remove provisions without rewriting the entire Will. Must be executed with the same formalities as the original Will — signed by the testator and two adult witnesses.
Superannuation Beneficiary Designation Form (Australia)
Create an Australian superannuation death benefit nomination form covering binding and non-binding nominations. Complies with the Superannuation Industry (Supervision) Act 1993 (Cth) and SIS Regulations 1994 regulation 6.17A. Nominate up to three dependants or your legal personal representative, with two-witness execution requirements and three-year lapsing rules.
Discretionary Trust Deed (Family Trust) — Australia
Create an Australian Discretionary (Family) Trust Deed compliant with the Income Tax Assessment Act 1936 and 1997 (Cth) and applicable state trustee legislation. Includes settlor, individual or corporate trustee, primary and general class beneficiaries, Appointor with succession provisions, 80-year vesting date, trustee powers, Family Trust Election provisions, income distribution mechanics, CGT 50% discount, stamp duty obligations, and ATO registration requirements. Suitable for asset protection, estate planning, and tax-effective income splitting among family members.
Enduring Power of Attorney (Australia)
Create an Australian Enduring Power of Attorney that authorises a trusted person to manage your financial and property affairs if you lose legal capacity. Covers state-specific requirements across NSW, VIC, QLD, WA, SA, TAS, ACT, and NT. Includes financial authority scope, commencement options (immediately or on incapacity), conditions and limitations, gifts authority, and authorised witness attestation requirements under the Powers of Attorney Act of your jurisdiction.