Every Federal Budget brings a fresh cycle of headlines, commentary, predictions and strong opinions about what comes next. Last night was no exception.

The 2026–27 Budget covers a broad sweep. The headline measures include a permanent $20,000 instant asset write-off and the return of loss carry-back for small business, a new Working Australians Tax Offset, a $1,000 instant work-related deduction, and a proposed reshaping of the capital gains tax discount, negative gearing, and discretionary trust taxation from 2027 onwards. Taken together, the structural changes are being described as the most significant reform to Australia's tax system in close to three decades.

For families with discretionary trusts, family trusts, or testamentary trusts inside their estate plan, the proposed 30 per cent minimum tax on discretionary trusts is the measure that has drawn the most commentary.  The inbox alerts started shortly after the Treasurer sat down, much of them framed in the language of disruption.

Read through an estate planning lens, the picture is more coherent than the headlines suggest. The CGT discount, negative gearing settings, the new trust regime, and the rollover relief into companies and fixed trusts all touch the same underlying question, which is how Australian families hold, grow, and pass on wealth across generations. That is our terrain, and it is the lens I want to bring to this commentary.

The work of estate planning has always been long-term work

Sophisticated estate planning has never been static. The legislative environment shifts roughly every decade or so, and the families who fare best across generations are those whose planning is designed to absorb that movement, not those who try to outrun it.

The 2026–27 Budget is part of a long pattern. It introduces a proposal. It opens a consultation period. It will move through draft legislation. The shape that finally emerges in 2028 is likely to differ in important respects from what was announced this week, and our work, as it has always been, is to read the movement carefully and adapt strategy as the picture becomes clearer.

This is the ordinary rhythm of considered planning.

Tax was always one part of a much larger picture

A great deal of the public conversation about trusts is framed around tax. That framing has always been incomplete.

Families with substantial assets use testamentary trusts because they want their children's inheritances to survive a relationship breakdown. They want assets to be insulated from a future bankruptcy. They want wealth to remain along the bloodline if a surviving spouse later repartners. They want a vulnerable beneficiary to be supported for life without ever having to manage capital they cannot manage. They want a young beneficiary to receive their inheritance gradually, on terms shaped by a parent's judgment rather than by the calendar.

None of those reasons depends on the tax rate that applies to the trust's income.

The strategic architecture of a testamentary trust, its capacity to protect, to direct, to preserve, and to adapt over decades, is the reason families build them. Taxation has always been a useful feature of that architecture. It has never been the foundation.

What the proposed 30% minimum tax on discretionary trusts actually says

The announcement is, by design, a starting point. The materials released so far indicate that from 1 July 2028, the trustee of a discretionary trust will be required to pay a minimum 30 per cent rate of tax on the trust's taxable income. Beneficiaries, other than corporate beneficiaries, would receive non-refundable credits for the tax paid by the trustee, recognising the tax already paid at the trustee level.

The Government has also announced rollover relief for those who may wish to restructure out of a discretionary trust into a company or a fixed trust. The rollover is proposed to be available for three years from 1 July 2027.

Several categories are intended to sit outside the proposed minimum tax, including:

• Fixed and widely held trusts

• Complying superannuation funds

• Special disability trusts

• Deceased estates

• Charitable trusts

• Primary production income

• Certain income relating to vulnerable minors

• Income from assets of testamentary trusts existing at announcement

The precise scope of those carve-outs is exactly the kind of detail that the consultation period is designed to settle.

Two aspects, in particular, will be worked through as the legislative materials develop. The first is how broadly the testamentary trust exemption is intended to operate, and whether "existing at announcement" is read to include testamentary trusts already drafted into a Will, or only those that have been activated after death and are running. The second is how the vulnerable beneficiary exemption will ultimately be defined, and whether that definition extends to minor beneficiaries of testamentary trusts more generally.

Neither question is unusual at this stage. Both will be resolved through the explanatory materials and draft legislation that follow an announcement of this kind, and we will read those papers carefully as they arrive.

Reading the rest of the Budget through a succession lens

The other structural measures in the Budget are part of the same broader conversation.

The proposed changes to the capital gains tax discount and to negative gearing settings reshape how investment property and other long-held assets are taxed during a lifetime. From an estate planning perspective, that invites a thoughtful look at how a family balance sheet is assembled in the years before a succession event, how assets are held, and how cost base, holding entity, and beneficial interest interact at the moment wealth passes between generations. This is familiar work for an estate planner. The Budget simply changes some of the inputs.

For families who run businesses through a discretionary trust, the proposed minimum tax, the rollover relief into companies and fixed trusts, and the broader CGT and negative gearing changes together invite a calm conversation, over the next year or so, about whether the structures that served the early years of a business are still the right structures for its next phase, and for the succession event beyond that. There is no urgency in any of this. There is only the value of having a measured conversation in good time, with the benefit of the actual legislative detail, alongside the right advisors.

The small business cash flow measures and the household tax offsets sit a little further from succession planning. They affect the speed at which family wealth accumulates, which is always relevant to the longer question of how that wealth is eventually structured and passed on.

The wider architecture of a well-built estate plan

A well-built estate plan is rarely a single structure. It is a set of interlocking pieces designed to work together across the long horizon of a family's life.

A testamentary trust sits inside a Will. Binding death benefit nominations direct superannuation thoughtfully. Powers of attorney and appointments of enduring guardian provide for incapacity. Family trusts hold business and investment assets during a lifetime. Superannuation proceeds trusts handle insurance payouts with care. Financial agreements protect across relationships. Corporate structures sit alongside the trust framework where business is involved. Each piece does work the others cannot.

It is the way these pieces fit together, and the way they are drafted to flex over time, that determines whether a plan is doing its job ten or twenty or fifty years after it is signed.

Flexibility and durability are not accidental

The drafting style we use at Family First Estate Planning has always favoured flexibility and durability. We build plans on the assumption that legislative landscapes will move, that family circumstances will change, and that the best service we can offer is a framework with enough room to adapt to both.

That shows up in practical ways. In the breadth of beneficiary classes we draft into testamentary trusts. In the way control is structured between trustees and appointors, with the capacity to evolve over time. In the optionality we build into wills so that adult beneficiaries are necessarily not locked into a single structural outcome at the moment of activation. In the careful interaction between the will, the family trust, the binding nominations, and the corporate documents.

A plan built this way is not a plan that needs to be rewritten every time a Budget is handed down. It is a plan designed to absorb the Budget, the next Budget, and the one after that.

The long view

Estate planning, at its best, is quiet work. It carries on in the background of a family's life, holding the architecture in place while the world around it changes. That has always been the way we approach it, and that is what we will continue to do.

We will keep reading the legislative detail as it develops, and I will write again as the picture sharpens.

About the author

Jaime Stefanac is the Legal Director of Family First Estate Planning. She works with families and business owners across Australia on testamentary trusts, asset protection, succession planning, and long-term family wealth structuring.

If you would like to start thinking about your own estate plan, the most practical first step is often Sorted Life, our life organisation system that brings clarity to the everyday admin that sits underneath every estate plan. From there, families ready for the next step can book a Family Wealth Planning Session to design the right structure for their circumstances.

The information in this article is general in nature only. It is not legal, taxation, or financial advice and is not intended to be relied on as such. The proposed measures discussed are in early stages, are subject to consultation, and may change materially before any legislation is enacted. Personal, family, and business circumstances vary, and tailored advice from appropriately qualified advisers is essential before making any decisions about your estate plan, trust structures, or related arrangements. You can read the official Tax Explainer here.