As many of you will have seen, last night’s Federal Budget included a number of proposed measures relating to discretionary trusts, testamentary trust structures, capital gains tax and property investment.
Whilst the detail of the legislation is still evolving, the proposals have already generated significant discussion amongst lawyers, accountants, financial advisers and business owners across Australia.
At Albert & Middle Park Lawyers, many of our clients are:
- property owners and investors
- business owners and professionals
- families with existing trust structures
- and individuals with established estate planning arrangements
For those clients, the broader direction of travel is becoming increasingly important.
Importantly, many existing arrangements appear likely to receive some form of transitional or grandfathering protection. However, the proposed changes suggest that long-standing assumptions surrounding trusts, succession planning, property ownership and intergenerational wealth transfer may no longer remain static over time.
One area currently attracting particular attention is the future treatment of discretionary testamentary trusts established after the Budget announcements. Whilst the final position remains uncertain pending draft legislation, many experienced advisers are already observing that families may wish to proactively review existing estate planning arrangements while flexibility remains available.
Importantly, testamentary and discretionary trust structures continue to provide significant benefits beyond taxation alone, including:
- asset protection
- preservation of family wealth across generations
- succession flexibility
- protection in circumstances of bankruptcy or relationship breakdown
- and broader family governance outcomes
Many existing Wills, trust structures and property ownership arrangements were prepared based on legislative assumptions that may now evolve over coming years. As a result, we expect many clients will wish to review:
- existing Wills and testamentary trust provisions
- family trust structures
- powers of attorney and incapacity planning
- property ownership structures
- business and investment holding arrangements
- and broader succession planning strategies
An important practical consideration is that the ability to revisit estate planning arrangements can diminish over time due to age, illness or loss of testamentary capacity. Proactive review and strategic planning are therefore generally preferable to reactive decision-making later.
Our team is continuing to monitor developments closely and will provide further updates as greater clarity emerges.
In the meantime, clients who wish to undertake a strategic review of their estate planning, trust structures or broader asset ownership arrangements are welcome to contact our office to arrange a confidential consultation.
Kind regards,
Albert & Middle Park Lawyers
70 Bridport Street
Albert Park VIC 3206
(03) 9969 3660