Estate planning is not just for the wealthy — it’s essential for every Australian who owns assets, has dependents, or wants control over how their wealth is passed on. Without a proper plan, your estate may face delays, disputes, unnecessary taxes, or decisions made by state laws instead of your wishes.
This blog explains the fundamental estate planning procedure follow, specifically for Australians, in a clear and practical way. You’ll find:
- Step-by-step processes
- Real-life examples
- Australian legal terms
- Tax considerations
- Calculations in AUD
✅Understand Why Estate Planning Matters in Australia
Before jumping into documents and legal terms, Australians need to know why estate planning is essential:
- Ensures your assets go to the right people
- Reduces disputes among family members
- Helps avoid unnecessary taxes and legal costs
- Decides who controls finances and health decisions if you lose capacity
- Protects minors, businesses, and partners
About 50% of Australians die without a Will, leaving families to deal with complex laws. Even if you own a small home, a bank account, or superannuation, an estate plan matters.
✅ Start with an Asset & Liability Inventory
Listing your financial situation helps build your estate plan properly.
Example Asset List (AUD)
| Asset Type | Example Value | Ownership |
| Family home | $850,000 | Joint |
| Investment property | $600,000 | Sole |
| Superannuation balance | $220,000 | Individual |
| Bank savings | $45,000 | Joint |
| Shares & ETFs | $65,000 | Individual |
| Life insurance policy | $500,000 cover | Individual |
Liabilities Example
- Mortgage on home: $300,000
- Loan on investment property: $150,000
This list forms the base for deciding how assets will be distributed.
✅ Define Estate Planning Goals
Your goals influence your documents and instructions. Common Australian goals include:
- Provide for spouse, partner, or children
- Protect family from disputes
- Avoid full probate delays
- Manage tax on superannuation payouts
- Safeguard assets from ex-partners or creditors
- Leave part of estate to a charity
Example:
“I want my partner to stay in the house, my kids to get investment property proceeds, and a portion of my super to be paid tax-effectively.”
✅ Choose the Right Estate Structures
Estate planning in Australia mainly uses:
✅ Wills
A Will sets out who inherits your estate. You must choose:
- Executor
- Beneficiaries
- Guardians for minors
However, Wills go through Probate and don’t control superannuation.
✅ Trusts in Australian Estate Planning
- Testamentary Trusts
Created through a Will, active after death. Good for:- Children under 18
- People with disabilities
- Tax minimisation
- Asset protection
- Family (Discretionary) Trusts
Common for business owners and investors. - Special Disability Trusts
Protects vulnerable dependents with government concessions.
✅ Powers of Attorney & Advance Care Directives
These documents protect you while alive, especially if you become incapacitated.
- Enduring Power of Attorney (EPOA): Handles financial/legal matters
- Enduring Guardianship: Makes health and lifestyle decisions
- Advance Care Directive: Documents medical treatment preferences
Without them, your family might need court permission to act.
✅ Plan for Your Superannuation
Super does not automatically flow through a Will. You need a Binding Death Benefit Nomination (BDBN).
Options for Super Distribution
✅ To spouse — often tax-free
✅ To dependent child — tax-free up to conditions
✅ To adult child — may pay up to 17% tax
Example Calculation
Super Fund Balance: $300,000
Beneficiary: Adult child (non-dependent)
Taxable component: 100%
Tax = 15% + Medicare levy (2%) = 17%
So,
$300,000 × 17% = $51,000 tax
Beneficiary receives $249,000
With proper planning, that tax could be avoided.
✅ Decide Who Will Manage Your Estate
You must nominate the right people:
| Role | Responsibility |
| Executor | Carries out your Will, pays debts |
| Trustee | Manages trusts after your death |
| Guardian | Looks after children under 18 |
| Attorney (EPOA) | Handles finances while you’re alive |
| Enduring Guardian | Makes health care decisions |
Choose responsible people and name backups.
✅ Tax Impacts in Australian Estate Planning
While Australia has no “inheritance tax”, taxes can still apply.
✅ Capital Gains Tax (CGT)
- Main residence is usually tax-free
- Investment assets may attract CGT
- Beneficiaries inherit CGT liability
Example:
You bought an investment property in 2010 for $400,000.
At death in 2025, it’s worth $800,000.
CGT basis transfers to beneficiaries.
When sold, capital gain = $800,000 – $400,000 = $400,000
If sold more than 12 months later, 50% CGT discount applies.
Taxable amount = $200,000
If beneficiary’s tax rate is 32.5% →
$200,000 × 32.5% = $65,000 CGT payable
Planning can help reduce this.
✅ Superannuation Tax Example
Super payout: $600,000
Beneficiary: Non-dependent adult child
Taxable portion: 80% ($480,000)
Tax = 15% of $480,000 = $72,000
Beneficiary receives $528,000
If left to spouse instead → $0 tax
✅ Draft Key Legal Documents in Australia
These are the essential estate planning documents most Australians need:
- Last Will and Testament
- Binding Death Benefit Nomination (super)
- Enduring Power of Attorney
- Enduring Guardianship
- Advance Care Directive
- Testamentary Trust clauses (if needed)
- Letter of wishes (optional guidance)
Make sure documents are signed and witnessed correctly according to your state’s laws.
✅ Fund Your Estate Plan Properly
Creating a trust or Will is not enough — you must legally align your assets.
Key Actions
- Update property titles (if trust involved)
- Update beneficiaries for life insurance and super
- Review joint ownership vs sole ownership
- Move business interests if required
If assets are not linked correctly, probate or state intestacy laws might apply.
✅ Communicate Your Plan and Store Documents Safely
Tell the executor, guardian, and attorney where documents are kept.
Suggested Storage Options:
- Secure home safe
- Lawyer’s office
- Bank safety deposit box
- Digital vault with backups
Never lock Will in a place no one can access.
✅ Review and Update Regularly
You should update your estate plan when:
- Marriage or divorce occurs
- You have kids (or grandkids)
- You buy/sell property
- You retire or change super funds
- You start or close a business
- A beneficiary dies
- Laws change
Example:
A couple divorces in NSW. Their existing Will still leaves assets to the ex-spouse. Without updating, probate may trigger conflicts or unintended transfers.
✅ Sample Scenario & Tax Outcome
Case: The Thompson Family (NSW)
- Husband and wife, two teenage children
- Home: $1M (joint)
- Investment property: $550K
- Super: $450K each
- Joint savings: $70K
- Life insurance: $800K combined
Without an estate plan
- Super may go to estate or wrong person
- Probate delays could take 8–18 months
- CGT might apply on property sale earlier than necessary
- Guardianship issues for minors
- Legal fees could exceed $25,000+
With estate planning
- Testamentary trust lowers tax on children’s inheritances
- Super goes directly to spouse tax-free
- Investment property CGT managed with 50% discount
- Guardians appointed, no court involvement
- Assets transferred faster and privately
Estimated tax saved: $70,000–$100,000
Also Check: Essential Estate Planning Tips for Australians
✅ Common Mistakes Australians Make
❌ No Will at all
❌ Not updating super beneficiaries
❌ Believing “everything goes to my spouse automatically”
❌ Ignoring tax on investment gains
❌ Forgetting about digital assets and businesses
❌ Not planning for incapacity
❌ Assuming DIY templates are enough
✅ Final Checklist: Fundamental Estate Planning Procedure Follow
✔ Make your asset and liability list
✔ Clarify your goals and beneficiaries
✔ Choose executor, guardians, trustees
✔ Draft a valid Australian Will
✔ Set up testamentary or family trusts (if needed)
✔ Complete Binding Death Benefit Nomination for super
✔ Arrange Enduring Power of Attorney
✔ Create Advance Care Directive and Guardianship
✔ Review tax impacts (CGT, super tax)
✔ Update titles, insurance, and documents
✔ Store everything safely and tell key people
✔ Review every 2–3 years or after life changes
✅ Final Thoughts
Estate planning in Australia isn’t about how much you own — it’s about controlling where it goes, protecting the people you love, and avoiding unnecessary tax, legal delays, and stress.
By following the fundamental estate planning procedures discussed above, Australians can:
- Secure their legacy
- Protect their superannuation
- Reduce or delay capital gains tax
- Prevent family disputes
- Fast-track asset transfer
- Provide for dependents with clarity
