Simple Wills vs Testamentary Trust Wills: Understanding Your Options in Victoria

Which Will Is Right For Me?

What a Will Actually Does and Why It Matters

A will is a legal document that sets out who will manage your affairs when you die and who should receive your assets. In Victoria, if you pass away without a valid will, the law decides how your estate is divided. This may not reflect your wishes, and it can create stress and cost for your family.

Having a will - any will - is about clarity. It gives your loved ones direction at a time when they need it most.

What Is a Simple Will?

A simple will sets out:

• who you want to act as your executor,
• any basic gifts or instructions (such as leaving a particular item to a particular person), and
• who should inherit the rest of your assets.

It does not create ongoing structures, tax planning mechanisms, or special protections for beneficiaries. It’s the most common type of will and is perfectly adequate for many people.

When a Simple Will Is Usually Suitable

A simple will often works well when:

• your estate is modest or straightforward,
• your beneficiaries are adults who can manage their own finances,
• your family situation is uncomplicated,
• you are not concerned about tax planning or protecting assets from risks such as divorce, bankruptcy, or spendthrift behaviour, and
• you don’t have any children / grandchildren with special needs.

Many people preparing their first will find that a simple will meets their needs.

What Is a Testamentary Trust Will?

A testamentary trust will contains all the usual elements of a simple will, but it goes a step further. It creates one or more trusts that come into effect only after your death. The executor then becomes responsible for setting up and administering those trusts.

A testamentary trust gives a trusted person (the trustee) controlled discretion over how the inherited funds are managed and distributed. This can provide both asset protection and tax flexibility for your beneficiaries.

How a Testamentary Trust Works in Practice

• Your assets are transferred into a trust rather than directly to a beneficiary,
• The trustee decides when and how funds are distributed, following the rules you set out in the will,
• Beneficiaries receive income or capital over time rather than in one lump sum, and
• Because the trust is created by a will, it can offer significant tax advantages - particularly for minor children who may be taxed more favourably on trust income.

When a Testamentary Trust Is Usually Relevant

These wills are commonly recommended where:

• Beneficiaries are minors,
• A beneficiary lives with a disability or vulnerability (for example, difficulty managing money, addiction concerns, or exposure to financial pressure from others),
• You want stronger asset protection - for example, to reduce the risk of an inheritance being lost in a divorce or bankruptcy,
• You’re part of a blended family, and you want to support your partner while ultimately protecting,
• Your children’s inheritance the estate is large or includes business interests, investment properties, or other complex assets, and
• Tax planning could make a meaningful difference to beneficiaries over the long term.

Which Option Is Right for You? Key Considerations

Choosing between a simple will and a testamentary trust will isn’t about one being “better” than the other - it's about the right fit for your circumstances.

Here are the main questions to weigh:

1. Estate Size and Asset Complexity

If your estate is small and uncomplicated, a simple will may be entirely sufficient. Larger or more complex estates often benefit from the structure of a trust.

2. Your Beneficiaries’ Needs

• Think about the people who will receive your estate:
• Are they financially mature?
• Are they minors or young adults?
• Do they live with vulnerabilities?
• Are they at risk of relationship breakdowns or bankruptcy?

If any of those apply, the protective features of a testamentary trust may be worth considering.

3. Blended Family Considerations

Where there are children from previous relationships, a testamentary trust can help balance competing needs - supporting a partner while preserving assets for children down the line.

4. Asset Protection and Long‑Term Planning

Trusts can shield assets from external risks and help preserve wealth across generations. A simple will does not provide those protections.

5. Potential Tax Benefits

Testamentary trusts can allow income to be distributed in tax‑effective ways, particularly for minors. Even a modest estate may benefit from this.

A Good First Step: Get Personalised Advice

There is no one‑size‑fits‑all answer. Many people start with a simple will and later move to a testamentary trust will as their family or financial circumstances evolve.

A conversation with an estate planning lawyer can help you understand what each option means in practical terms - and make a choice that reflects your values, your life, and the people you care about.

Ready to Plan Your Estate?

If you’re unsure which will is right for you, we can guide you through the decision with advice tailored to your circumstances. A short conversation can help you understand your options clearly and confidently.

Most importantly, having a will is better than having no will.

Contact our team to arrange a consultation.