Same asset. Same income. But a completely different outcome.

When it comes to protecting your family, how you structure your Will can be just as important as how much you leave behind.

Many people assume that leaving their assets directly to a spouse or children is enough. But with one small change to the structure of your Will, that same $1 million can work much harder — growing, protecting, and supporting your family for generations.

Case study: The $1 million life policy

When Dan passed away unexpectedly, his life insurance policy paid out $1 million. His wife, Lucy, was suddenly responsible for managing their two young children and their entire financial future.

She had two choices.

Option 1: Leave $1 million directly to the spouse

The funds were invested and earned about $50,000 per year. That income was fully taxable in Lucy’s name and pushed her into a higher tax bracket, meaning thousands lost each year in tax. The money was still used for the kids — school fees, mortgage payments, everyday expenses — but a large slice went straight to the ATO.

Option 2: Leave $1 million into a Testamentary Trust

That same $50,000 in annual income could instead be distributed to their two minor children. Each child’s share of the income was taxed as if they were adults, not minors. The first $22,000 per child, per year, could be received completely tax-free.

Over time, that meant more money stayed in the family and built long-term wealth.

Lucy was able to cover school fees, extra-curricular activities and family expenses all from the trust’s income, without eroding the capital. The $1 million remained invested and continued to support the children for years, while the family saved tens of thousands in tax.

Why testamentary trusts change everything

A Testamentary Trust (sometimes called a Family Line Trust or Generational Trust) is created inside your Will. It only comes into effect if you pass away, but once active, it provides flexibility and protection.

It offers several key advantages:

• Tax efficiency – income can be distributed in a tax-smart way across family members

• Asset protection – assets can be kept safe from bankruptcy, lawsuits or relationship breakdowns when managed prudently

• Generational wealth – enables funds to last beyond one lifetime, supporting children and grandchildren

• Flexibility – adapts to changing family circumstances

• Control – you decide who manages the trust and how the funds are used

The hidden wealth strategy most families aren’t told about

Most families I meet have never been told this. But this is exactly what turns a Will into a long-term wealth plan.

You don’t need millions in the bank or a complex structure. Many everyday families — tradies, teachers and business owners — already have the ingredients through superannuation, life insurance and home equity.

It’s one of the most powerful, and most underused, strategies in estate planning. It’s legal, flexible and surprisingly affordable to set up properly.

A real-world transformation

Lucy later told me, “I wish I’d known this earlier. I thought a Will was just paperwork. Now I know it’s a plan that protects my kids, no matter what.”

That’s the peace of mind that good planning brings. It’s not about being wealthy — it’s about planning like the wealthy do.

Next steps

If you’re raising kids, building wealth or blending families, this is how you protect your people and keep more in their hands, not the ATO’s.

Here’s how to take the next step:

1. Download our Pricing and Packages Guide – understand exactly what’s included and how it all works.

2. Book a free 15-minute Legal Clarity Call – ask questions and get tailored guidance.

3. Start your Will online today – turn your wishes into a legacy that lasts generations.

Disclaimer

This article provides general information only and is not legal advice. Seek personalised advice from a qualified estate planning professional before making decisions about your Will or testamentary trust.