Settled Estates

At times, there is a beneficiary named in a will that does not receive any direct capital, but rather is assigned a portion of the future income of the estate, this is known as a Settled Estate (the individual is said to have an interest in a “settled estate”).

A Settled Estate is the expression that applies to someone (a beneficiary) whose share of the estate is restricted to part (or all) of the income of the estate only.  They do not receive any capital.

This could be the proceeds of a business investment or rental income of a property investment, for example.  A particularly tricky task to document in advance, as you need to factor in the role & expectations of the Trustee and any other powers that the deceased has outlined in the will.  If not itemised correctly then restrictions to the investment for trusts are set out in the Trustee Act.

For example, a willmaker may leave the income that is accrued by the estate to their spouse, and then after the spouse passes the generated income is then passed on to the children.  The trustee is then obligated to invest the assets of the trust such that it protects the income due to the spouse and children.   The willmaker can articulate in the will how they wish the settled share to be invested, however if the will does not specify, it would be recommended the trustee enlist professional advice, as this area of law is exceedingly complex.

If you are planning on incorporating any income provisions into a will you should seek the advise of a Wills & Estates Lawyer – as it is a complex area of Estate Law.  You should consider such questions such as:-

  • How is the value of the investment preserved?
  • Who are you expecting to manage this investment?
  • How long do you think the estate be generating an income?
  • What happens when the capital is realized?
  • Has a Settled Estate provision been set out in a will already?

Related Posts

It’s time to address your Estate planning ‘Estate Planning’, it’s something that we put off.  Perhaps because we don’t feel like we have an ‘estate‘ or perhaps our ‘estate’ is too complex.  Some have lodged a will 20 years ago, the majority of us still haven’t ever got around to… Read more…

What do I do about Loss of Capacity and your SMSF

A loss of capacity of a person can occur when a person is unable to understand the nature of a document or is unable to communicate a decision. Read more…

Related listings

Koolik & Associates Lawyers

07 3482 3333

5 Discovery Drive North Lakes QLD 4509

8:30am - 5:00pm week days - Saturday, Sunday Closed

Array

Confidently seek our professional advice on three broad areas – Family & De Facto Law, Wills & Estates Law and Conveyancing Law. Koolik & Associates Lawyers is a law firm located in the heart of North Lakes, just north of Brisbane. Read more…

Young and Muggleton Law Firm

0295683655

99 Percival Rd Stanmore NSW 2048

Array

Young and Muggleton are accredited specialist in personal injury and has specialised in that work for 18 years. Young and Muggleton was established in Stanmore 26 years ago. It has provided continuous legal services from its current premises during that time. Read more…

JJ Honeyman & Associates

0292313344

Level 5 / 300 George St Sydney CBD NSW 2000

9:00am - 5:00am week days - Saturday, Sunday Closed

Array

Established in 1973, we are a small, friendly firm centrally located at Wynyard in the CBD and dedicated exclusively to the delivery of prompt and personalised service. Read more…

Gerard Malouf and Partners – Contesting Wills

1800 004 878

Level 1, 307 Peel Street Tamworth 2 2000 View Additional Office Locations

563 Victoria Road, Ryde 2 2112
02 9808 3444
Suite 4, 30-32 Campbell Street, Blacktown 2 2148
02 9622 8885
Level 2, 215 George Street, Liverpool 2 2170
1800 004 878
Level 6, 10 Help Street, Chatswood 2 2067
1800 004 878
Shop 3A, 263 Quee Street, Campbelltown 2 2560
1800 004 878
Level 1, 29 Kiora Road, Miranda 2 2228
1800 004 878
Level 3, Suite 3.11, 4 ILya Street, Erina 2 2250
1300 768 780
Level 1, 19 Darby Street, Newcastle 2 2300
1300 768 780
By Appointment. Level 1, 1 Burelli Street, Wollongong 2 2500
1300 972 395
Suite 3, 83-85 River Street, Ballina 2 2478
1800 004 878
Level 1, 307 Peel Street, Tamworth 2 2340
1300 768 780
Room 16, 33 Fitzmaurice Street, Wagga Wagga NSW 2650
1300 768 780
Ground Floor, 25-27 Grose Street, Parramatta 2 2150
02 9630 4122
2/11-13 O'Keefes Lane, Kogarah 2 2217
1800 004 878
Consulting rooms - Shop 8-10, 458-470 High Street, Penrith NSW 2750
02 4722 6074
Level 5, Nexus Norwest, 4 Columbia Court, Baulkham Hills NSW 2153
1800 004 878
Level 22/101 Grafto St, Bondi Junction NSW 2022
1800 004 878
By Appointment. Club Mudgee, 99 Mortimer Street, Mudgee NSW 2850
1800 004 878
Unit 5, 1 Sands Street, Tweed Heads NSW 2485
1800 004 878

Array

Our firm specializes in all forms of WILL and INHERITANCE DISPUTES – Australia wide, running many hundreds of cases per year. We at Gerard Malouf and Partners (GMP) offer legal services to those involved in will and inheritance disputes throughout Australia. Read more…

S+P Lawyers

1300277000

Level 1, 75 Magellan Street Lismore NSW 2481 View Additional Office Locations

8:30am - 5:00pm week days - Saturday, Sunday Closed

Level 1, 75 Magella Street, Lismore NSW 2480
Level 2, 6 Marvell St., Byro Bay NSW 2481

Array

We have an established reputation in business law, property law, compensation law, wills and estates and litigation. Based in New South Wales, S+P Lawyers is a law firm with an established name in commercial law, litigation, property law, wills and estates, and compensation law. Read more…