Federal Budget 2026: Implications for Trusts and Estate Planning
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, advisers, business owners and farming families across Australia.
At Harris Lieberman, many of our clients are:
- business owners and operators
- farming and regional families
- professionals and investors
- and individuals with long-standing family, trust and succession structures
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, family asset 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, farming succession arrangements and business ownership structures 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 and business structures
- farming and intergenerational succession arrangements
- powers of attorney and incapacity planning
- property ownership structures
- and broader family asset protection 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, business structures or broader succession arrangements are welcome to contact our office to arrange a confidential consultation.
Kind regards,
Harris Lieberman
Albury-Wodonga Lawyers & Advisers