Estate Planning After the Budget: Control, Protection and Intergenerational Wealth

The 2026 Federal Budget discussion has focused heavily on tax reform. For advisers, accountants and lawyers, however, the more significant issue may be broader than tax rates or trust distributions.

The real question is how Australian families will hold, control, protect and transition wealth over the next generation.

Much of the public commentary has centred on:

• negative gearing;

• CGT reform;

• discretionary trust taxation; and

• “bucket company” structures.

Those issues are important. But beneath them lies a more strategic estate-planning question: if the proposed reforms proceed, will traditional annual tax-driven structuring become less attractive, and will long-term succession planning become more important?

From annual tax planning to long-term wealth architecture

For many years, family wealth structures have often been designed around annual tax outcomes. Discretionary trusts, income streaming, bucket companies and long-term tax deferral have all been used as part of broader family wealth planning.

The Budget signals that this era will be changing.

If the proposed reforms proceed, some families may find that:

• ordinary discretionary trusts become less tax effective;

• ongoing income splitting becomes harder;

• future accumulation strategies become less attractive; and

• a greater focus on building wealth through superannuation funds, particularly SMSF’s

That does not mean estate planning becomes less important. It may mean the opposite.

As tax-driven structuring becomes more constrained, the value of genuine succession planning may increase. Families may need to give greater attention to control, asset protection, beneficiary protection, governance and the way wealth moves between generations.

In that context, estate planning is not merely a will-drafting exercise. It is a framework for how wealth is owned, controlled and transferred.

Testamentary trusts as succession structures

Testamentary trusts may become increasingly important in this environment. At present, the budget papers appear to exclude testamentary trusts from the 30% tax on discretionary trusts, making them valuable vehicles for intergenerational wealth transfer.

A testamentary trust is distinct from an ordinary discretionary trust because it is created through a will and operates as part of a person’s succession plan. It is not merely a tax structure. It is a succession structure.

Testamentary trusts can help families address issues including:

• asset protection;

• bloodline protection;

• vulnerable beneficiaries;

• blended family planning;

• business succession;

• intergenerational wealth transfer; and

• long-term family governance.

This distinction matters as ordinary discretionary trusts are often used during life as part of family investment, business and income distribution arrangements. Testamentary trusts, by contrast, are linked to the transfer of wealth on death and the ongoing management of inherited assets for beneficiaries.

The Budget materials appear to distinguish testamentary trust assets from ordinary discretionary trust reforms. That apparent distinction should not be overstated, and the proposed reforms should not be treated as enacted law. However, if that distinction is maintained, it may become strategically significant for estate planning.

For advisers, accountants and lawyers, this creates an important planning conversation: how should wills, testamentary trusts, family companies, trusts, superannuation and investment entities interact as part of one coherent succession strategy?

Strategic questions for business owners and professionals

For Australian business owners and professionals, the Budget discussion raises several practical questions.

First, should business succession occur before proposed CGT reforms commence? Where wealth is held in business assets, family companies or investment entities, the timing and structure of succession may become a central issue.

Secondly, how should retained earnings and franking credits be managed post-retirement? Many families hold wealth through company structures. Decisions about retained profits, future distributions and control of company-held wealth can have both tax and succession consequences.

Thirdly, will existing family structures become increasingly valuable because of grandfathering? If proposed reforms distinguish between existing and future arrangements, the value of current structures may need to be considered carefully as part of broader estate and succession planning.

Fourthly, how should wills and estate plans integrate with superannuation, family companies and investment entities? A will does not necessarily control all of a person's wealth. Superannuation death benefits, company-held assets, trust assets and jointly held property may require separate but coordinated planning.

These questions are not simply technical. They go to the architecture of family wealth.

Control, protection and intergenerational wealth

Estate planning is no longer only about “who gets what”.

It is increasingly about:

• who controls wealth;

• where wealth is held;

• how wealth is taxed; and

• how wealth survives across generations.

This is where the Australian legal framework becomes important.

A technically sound will may still fail to produce the intended outcome if it does not align with superannuation arrangements, family trust control, company succession, business ownership, retained earnings and beneficiary needs.

Likewise, a tax-efficient structure may not protect wealth effectively if it does not address vulnerable beneficiaries, blended family risks, bloodline objectives or long-term governance.

The emerging theme is clear: wealth preservation may become more important than annual tax minimisation; family governance may become more important than streaming mechanics; and succession planning may become central to long-term family strategy.

The opportunity for advisers, accountants and lawyers

The Budget may ultimately accelerate the need for more sophisticated estate planning conversations across Australia.

For many families, the best time to review their structures may be before proposed reforms become law. That review should not be limited to tax outcomes. It should consider control, protection, succession, governance and the practical movement of wealth across generations.

At Inherit Australia, we believe the future of estate planning lies in helping advisers and lawyers have these strategic conversations earlier, more efficiently and with greater clarity.

Because good estate planning is no longer simply document preparation. It is family wealth architecture.