Q: My client recently passed away and left his investment properties to his three children as stated in his will. However, there's a condition: the income from these properties must be shared among his three children and eight grandchildren for the next 15 years. Can we create a trust to manage this income distribution evenly among the 11 beneficiaries over the next 15 years?
A: Legally, your client already established a trust through his will. It divides the income among the 11 beneficiaries and the property among the three children. The executors will act as trustees. There's no need to set up a new trust, as it might cause tax issues. The existing trust is called a testamentary trust. The grandchildren should be taxed at adult rates on their share of the income, with concessions applying.
If you have any questions, feel free to contact Tax Ideas Accountants & Advisers. You can also book an appointment through our live calendar.
