- By Ben Kemp (Fine Answers podcast – episode 166)
When it comes to securing your family’s financial future, the legal and financial landscapes rarely stand still. In the latest episode of the Fine Answers podcast, host Ben Kemp from Burke Britton Financial Partners sits down with returning guest Tristan Burke, a Senior Associate in Wills and Estates at Harwood Andrews, to unpack some major changes and hidden risks on the horizon.
If you are currently building wealth or considering engaging a financial advisor to support your legacy, understanding how these moving parts interact with your broader strategy is essential. Here are the key takeaways from their deep-dive discussion.
The Evolution of Testamentary Trusts
A major talking point right now centers around proposed federal budget changes regarding discretionary and testamentary trusts. While formal legislation is still pending, early outlines suggest a potential 30% tax on distributions from these trusts, including those established via a will.
Historically, a primary attraction of a testamentary trust has been the ability to distribute income to minors at adult tax rates. However, it’s vital to remember that these structures are chosen primarily for asset protection and flexible long-term wealth transfer. Individuals should avoid making estate-planning decisions based solely on speculation about potential legislative changes and should seek professional advice relevant to their circumstances.
Who Really Controls Your Wealth? Trustees vs. Appointors
Many business owners and investors establish corporate entities or family trusts without fully grasping the mechanics of legal succession. If the current controllers pass away or lose capacity, it isn’t the underlying assets themselves that automatically move—it is the control of the entity.
While most people understand the role of a “trustee,” the position of the “appointor” is far more critical. The appointor holds the ultimate authority to hire, fire, and replace the trustees. Failing to establish a clear, documented path of succession for your trust’s appointor may leave your structures highly vulnerable to administrative gridlock or unintended control during a family crisis.
Formalising Separations to Mitigate Estate Risk
One of the most profound insights shared in the episode involves a cautionary tale of a long-term separation that was never legally formalised through a property settlement or divorce. Decades later, following a passing, an estranged spouse may still have valid grounds to claim against an estate, potentially altering the intended inheritance for the children.
Proactively formalising family law matters and maintaining up-to-date documentation is can be one effective way to reduce risk and potential third-party vulnerabilities.
Addressing these complexities early protects your loved ones from severe emotional and financial distress down the track.
Superannuation Nominations: Not a “Set-and-Forget” Exercise
A very common misconception is that your superannuation automatically forms part of your estate and follows the instructions in your will. In reality, superannuation sits entirely separate unless you explicitly direct it to your estate through a binding death benefit nomination.
Furthermore, standard binding nominations in many standard retail and industry funds automatically expire and revert to “non-binding” status after three years. When a nomination expires, the ultimate decision-making power falls back onto the fund’s trustee or an independent body like the Australian Financial Complaints Authority (AFCA). Reviewing these nominations regularly can help improve the likelihood that benefits are distributed in accordance with your wishes.
Conclusion
As Tristan and Ben highlighted, effective estate planning is never a “one-size-fits-all” exercise. A truly robust strategy requires seamless collaboration between specialised legal counsel and an experienced financial advisor. By aligning your corporate structures, superannuation, and personal wishes, you can confidently navigate regulatory shifts and take steps to lock in a lasting legacy.
Are you certain your current wealth protection structures are optimised for upcoming legal changes?
This blog contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. If you decide to purchase or vary a financial product, your financial adviser, AMP and other companies within the AMP Group may receive fees and other benefits. The fees will be a dollar amount and/or a percentage of either the premium you pay or the value of your investment. Please contact us if you want more information.
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