Have you ever been told by a client that the testamentary trust will you have prepared is too long and complicated, and they don’t want to sign it? Follow these tips for some ideas on how to increase client comprehension and confidence in their testamentary trust will in the will review meeting.


If you’re looking for up to date and easy to use testamentary trust precedents, check out The Art of Estate Planning Testamentary Trust precedents for Australian lawyers at https://www.theartofestateplanning.com.au/tt-precedents

Video transcript

Hi, it’s Tara Lucke here. Have you ever received feedback from a client or another professional advisor working on your estate planning matter that the testamentary trust will you’ve drafted is too long? It’s overwhelming. The client doesn’t wanna sign it or even look at it. It’s a real challenge for us as lawyers, because the testamentary trust will has to be extremely comprehensive in order to give the flexibility to the family in the estate plan. But also we have to do our best to make understanding a testamentary trust will as easy as possible for the client. I think it’s a really common reaction for a client who has never had to look at these documents before. To reject a testamentary trust will if it does feel overwhelming or scary, it makes total sense. They don’t wanna look foolish. They want to understand what they are signing and get peace of mind from their estate plan.

And if they feel like they are presented with a document that is too intimidating, then that can be a real knee-jerk reaction to just say, No, I don’t wanna look at this document. So as lawyers, we have to do our best to be creative and think about how can we present these complex documents in a way that gives a client peace of mind, gives them comfort that they do understand the essential parts of the terms of the document they’re signing, whilst also making sure that we are covering off everything that we need to from a trust and legal perspective. I’d love to give you some food for thought about an alternate way that you can present your testamentary trust will to clients in a will signing an explanation meeting. So first things first. When I am meeting with a client to review the testamentary trust, will I prepared and to ideally encourage them to sign it.

I will not even open up the will for maybe the first 30 minutes of the meeting. Instead, I will focus on my trusty whiteboard going into a huge amount of detail in a practical sense about exactly how the estate plan will work. So for instance, if we are meeting with a young couple who have minor children, I might explain, you know, in your will we are setting up a testamentary trust. Ideally, this is not the first time we’ve presented the concept of the testamentary trust. We’ve given them flyers. We’ve possibly had earlier meetings where we’ve discussed the testamentary trust, but we wanna go over it. Again, it keeps cementing in those concepts. We’ll explain where their assets go. Here’s their surviving spouse over here in their own right, you know, perhaps their

Family home will end up directly in the hands of the surviving spouse and our other more liquid assets like superannuation, life insurance investments will end up in the testamentary trust. I’ll go over again. How does the testamentary trust work? Remember we have the trustee who is like the god of the trust, who controls the assets in the trust, which would be those inherited assets like the superin life insurance for the benefit of the surviving spouse and their kids. And they get to choose out of their immediate family as primary beneficiaries how to allocate the income that is earned by the inheritance each year and how to allocate any capital. I’ll remind them that when the surviving spouse is the trustee and perhaps the appointer it is going to look and feel like they’re money. But we have all these asset protection advantages from relationship breakdown, from family law protection bankruptcy exposure.

We have lots of income tax savings and we also have the ability to, you know, protect our children from being spent thrifts and blowing through their inheritance if both of our couple pass away. So keep reiterating what those benefits are for the testamentary trust. I’ll remind them how they can access some of the capital of the inheritance from the testamentary trust because a lot of clients worry that they will have their assets stuck in the testamentary trust. So we’ll talk about the ability to make capital distributions to the surviving spouse and children. Ideally that any capital should come out as a secured loan, but that they could pay off the mortgage with the assets of the testamentary trust substituting the bank as the mortgage holder with the testamentary trust. We’ll talk about what happens if they both pass away. You know, who’s going to control that testamentary trust for the benefit of their children until their children reach maturity. We can even talk about how that transmission of control will happen. What are the options available once the children do reach the specified age? You know, we’ll talk about the letter of wishes and how that interacts with the testamentary trust. So map everything out. Go over every possible practical scenario. Get them to ask all the questions they have. They can give you feedback on whether practically they think the strategy is going to work for them and just get really comfortable with it. So by the time you actually open up the document, for instance, if

You are using the Art of Estate Planning testamentary trust precedents. You know, the will itself might only be one to three pages, especially if there’s not a lot of extensive specific gifts or anything like that. So they can read the first three pages with you clause by clause until you get to the section which has the testamentary trust terms. So by that point in the meeting, they already understand conceptually, you know, how the testamentary trust works, all the practical interplay about the different scenarios and nuances. And so I find that they become a lot less fixated on understanding every single clause within the testamentary trust terms. And if your clients do already have, for instance, a family trust or a self-managed superfund, you can use analogies to explain they have a very extensive trusted for those structures that are already in place and we are just implementing a similar structure or document for the testamentary trust as well.

So I find by that point, you know, they don’t wanna read the trust terms clause by clause. If you can point out key definitions where they can see the names of the key people appointed, then the document suddenly becomes a lot more accessible to them. So look, doing diagrams on the whiteboard, it’s not the only way you might use prerecorded videos or Canva diagrams or something like that. But I just think if we can be creative as lawyers to make communicating how the testamentary trust works and translating the written words into something very practical and conceptual, then we’re probably going to get a lot more buy-in and confidence from our clients.