Finance
Aussie lawyer warns of ‘middle class’ family battles after budget introduces ‘backdoor death tax’
Australians are expected to pass on trillions of dollars in assets in the coming years as the grey tsunami of wealthy baby boomers crashes across the economy. But some of those expecting the windfall could be more likely to find themselves in a potential dispute with their loved ones as tax changes introduced to trusts commonly used in estate planning increase the likelihood of conflict.
Lawyers who deal with contested wills and estates foresee issues of conflict more likely to arise if the proposed changes go ahead. Alun Hill is the national director of the contested estates division of Armstrong Legal and believes there will be more reasons for discontent and for wills to be challenged due to the increased tax take being slipped in.
“It widens the battleground,” he told Yahoo Finance. “It just creates more reason why there might be someone who wants to contest a will.”
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Under the changes in Labor’s controversial budget, the unprecedented 30 per cent minimum level of capital gains tax will apply to the most common form of estate planning trust, known as a the testamentary discretionary trust.
While the government says its legislation pertaining to tax changes for trusts will be brought before parliament later this year, the slated changes would come into effect from July 1, 2028, and only specifically exclude fixed testamentary trusts. Fixed trusts are different from discretionary trusts as trustees don’t have the discretion to change the proportion of income a beneficiary is entitled to.
“Discretionary trusts aren’t just used as a tax minimisation vehicle,” Hill said. “Traditionally they’ve been used to provide the trustee with the ability to do what’s necessary to carry out the intentions of the testator (the person who wrote the will).”
While the finer details remain to be seen, the new tax floor regardless of the income of beneficiaries and the overall higher CGT on assets, will mean beneficiaries will see less passed on than previously expected – and that can be grounds for a challenge.
“What this really does is create the potential for claims being made against the estate by the spouse or by whoever the intended beneficiary is, who is no longer receiving adequate provision or appropriate provision under the testamentary trust,” Hill said.
The UK’s financial regulator should consider expanding its oversight to cover advanced artificial intelligence models used in financial services, according to a review commissioned by the Financial Conduct Authority (FCA), as policymakers assess whether existing rules can keep pace with rapidly evolving AI technology.
The Monetary Authority of Singapore (MAS), the city state’s central bank and financial regulator, has joined forces with major financial institutions and FinTechs to release a white paper aimed at keeping AI agents in finance operating within safe limits.
The paper, called Safeguards for Agentic Finance at Runtime (SAFR), lays out an industry-built framework designed to let AI agents perform financial tasks in a manner that is safe, secure and dependable. It has been produced under BuildFin.ai, the MAS programme that backs the responsible creation and rollout of AI tools across the financial sector.
The push comes as AI agents take on more autonomous work at a pace that makes hands-on human oversight impractical. In response, firms require real-time controls that keep agent behaviour inside the mandates, policies and risk limits they have defined. SAFR answers this with a series of governance checkpoints that check and log each action an agent proposes before that task is carried out.
The framework extends the AI Risk Management toolkit created through MAS’ Project Mindforge, concentrating on how protections can be put into practice at the moment an agent acts. The white paper maps out how measures such as policy bound execution, real time validation, auditability and interoperability can be woven into system operations, giving institutions the confidence to deploy agents consistently.
Industry participants have already tested SAFR in several settings. These include agent-assisted payments and treasury work, where agents handle routine transactions inside set mandates to cut friction and lift efficiency; wealth management and advisory processes, where agents examine documents and produce structured assessments within tightly defined task limits to speed up compliance reviews; and client engagement, where agents create insights and draft materials within approved content boundaries so staff can serve clients more productively.
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Talking about finances can be stressful, but it’s even more stressful if you’re not sure what advice is good and what advice might put you in a worse position than you started in.
Recently, a Reddit user who goes by market_vision1 asked, “What is the worst financial advice people still repeat?” I took out a little pen and paper while I was reading through these, like, “Lemme write that down. And that. Oh! And that, too!” I’m curious what you think, though. Are all of these things we should avoid financially?
1. “One of the more damaging ideas out there is ‘Oh, you’re young, don’t worry about money, just go have fun and worry about it when you are older.’ Of course, the number one regret I hear from clients nearing retirement is that they wish they had just started saving when they were younger.”
—u/hems86
2. “The ‘tax bracket’ myth should be illegal. My uncle turned down a $10K raise because he thought he’d ‘lose money.’ He literally paid $10,000 to avoid $2,200 in taxes. That’s not a tax strategy. That’s a $7,800 donation to the Dumba— Fund, and he’s the chair.”
—u/Serious_Cress5040
Related: “31 Things Only Super Wealthy People Can Buy That You Probably Don’t Even Know Exist”
3. “People living outside of their means and not realizing it. They say things like, ‘You deserve X, don’t settle for less.’ Most of the people I see who are broke are not 100% victims of the system. The majority of people waste their money on dumb stuff that they can’t afford. They’ll tell me they’ve cut out all unnecessary spending, but when I look at their actual expenses, I see otherwise. Spending $800 a month on DoorDash, financing a new car with a $900 monthly payment, going on international vacations, spending 70% of their income on rent in a fancier apartment when there are options for cheaper living.”
—u/hems86
4. “I’m a financial planner, and some of the worst advice I’ve ever heard is ‘Don’t pay off your credit cards in full. Carrying a balance on your credit card builds your credit; paying it off every month hurts your score.’ People say this to me all the time when I ask why they carry a balance on their card with 25% interest when they have more than enough to pay it off.”
—u/hems86
5. “It’s not so much advice as it is a financial choice. I know people who are taking out 96-month loans on cars they never should’ve considered in the first place, just because they can make the car note when it’s stretched over eight years. They never considered the interest on the loan plus the rate cars depreciate and are befuddled when they can’t afford to trade it in.”
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