A review of Bernard & Bernard [2019] FamCA 421 - A New Way to Protect Your Child’s Inheritance from a Future Divorce

Testamentary trusts have become increasingly attractive as an estate planning strategy to provide beneficiaries with flexibility and protection for inherited assets. The increasing personal wealth of this generation means they want certainty that the assets they pass to their children and grandchildren is done so in a tax effective environment while being protected from bankruptcy, divorce and other life events.

As a testamentary trust is separate to an individual’s estate, it provides greater asset protection if the terms of the trust are clearly thought out at the time of the preparation of the will.

The recent Family Court of Australia decision of Bernard & Bernard [2019] FAMCA 421 is a good example of how giving considered thought to your estate planning can give that protection. The case arose from the separation of the deceased’s son from his wife.