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 proposed changes have already generated significant discussion amongst accountants, lawyers, business owners and advisers across Australia.
At Alpass & Associates, many of our clients operate through family trusts, investment structures, trading entities and intergenerational business 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 discretionary trusts, succession planning, business structures 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 and business owners may wish to proactively review existing structures while flexibility remains available.
In our view, the current environment is likely to result in many clients reviewing:
- family trust structures
- bucket company arrangements
- business ownership structures
- existing Wills and testamentary trust provisions
- succession planning arrangements
- property ownership structures
- and broader asset protection strategies
Importantly, discretionary and testamentary trust structures continue to provide significant benefits beyond taxation alone, including:
- asset protection
- succession flexibility
- preservation of family wealth and business continuity
- and protection in circumstances of bankruptcy or relationship breakdown
Many existing structures were established based on legislative assumptions that may now evolve over coming years. As further detail emerges, we expect many individuals, families and business owners will wish to undertake strategic reviews to ensure their arrangements continue to operate efficiently and in accordance with their long-term objectives.
An important practical consideration is that the ability to revisit estate planning and succession arrangements can diminish over time due to age, illness or loss of 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 structures, succession arrangements or broader asset ownership strategies are welcome to contact our office to arrange a confidential consultation.