Understanding Simple vs Complex Wills in Australia: Key Differences and Considerations
June 25, 2025
Estate planning is a foundational step in securing your legacy, and choosing between a simple or complex Will depends on your assets, family dynamics, and long-term objectives. Below, we clarify the distinctions to help you make an informed decision.
What is a Simple Will?
A simple Will provides straightforward instructions for distributing your estate. Key characteristics include:
- Direct distribution: assets are left directly to beneficiaries as lump sums, percentages, or specific gifts (e.g. 'my children are to receive equal shares as tenants in common').
- Minimal structures: no trusts or complex conditions; executors transfer assets immediately after death.
- Ideal for: uncomplicated estates with modest assets, no dependents requiring special protection, and low risk of disputes.
Pros:
- Cost-effective: lower legal fees due to simpler drafting.
- Efficient administration: executors can distribute assets faster with fewer compliance steps.
Cons:
- Limited protection: beneficiaries receive assets directly, exposing inheritances to risks like divorce, bankruptcy, or irresponsible spending.
- Tax inefficiency: income generated by inherited assets (e.g., rental properties) is taxed at the beneficiary’s marginal rate, potentially increasing their tax burden.
What is a Complex Will?
A complex Will incorporates advanced structures to manage asset distribution under specific conditions. Key features include:
- Testamentary Trusts: assets flow into a trust upon your death, managed by a trustee for beneficiaries (e.g. minor children or financially vulnerable relatives).
- Custom conditions: distributions can be age-based (e.g. 'children inherit at 25'), staggered, or contingent on milestones (e.g. university graduation).
- Ideal for: larger estates, blended families, business owners, or beneficiaries needing asset protection (e.g. professionals at risk of lawsuits).
Pros:
- Asset protection: trusts can shield inheritances from beneficiaries’ creditors, divorce settlements, or poor financial decisions.
- Tax advantages: income generated by trust assets can be distributed strategically, potentially lowering overall tax liabilities (e.g. splitting income among lower-tax-rate beneficiaries).
- Greater control: specify how and when assets are used (e.g. funds for education only).
Cons:
- Higher costs: drafting and administering trusts requires specialised legal expertise, increasing fees.
- Administrative complexity: trustees must manage compliance, record-keeping, and annual tax filings for the trust (with increased fees to obtain accounting and/or financial advice to support if needed).
When to Choose Each Will Type
Opt for a simple Will if:
- Your estate is modest (e.g. under $500,000) and your beneficiaries are financially responsible adults.
- You seek a quick, cost-effective solution without ongoing administrative needs.
Choose a complex Will if:
- Your estate includes businesses, trusts or international assets.
- Beneficiaries require long-term protection (e.g. minors, individuals with disabilities, or high-risk professionals).
- You prioritise tax optimisation or wish to mitigate family conflict.
Conclusion
Selecting between a simple and complex Will hinges on your unique circumstances. While simple Wills offer efficiency for uncomplicated estates, complex Wills provide robust solutions for asset protection and tax planning. Consult Crabtree Legal to tailor your will to your goals—ensuring your legacy is distributed securely and as intended.
The Federal Government’s announcement today is a welcome development for families who use testamentary discretionary trusts as part of their estate planning. Following significant backlash to the 2026 Federal Budget proposals, testamentary trusts now appear to have been carved out from the proposed 30% minimum tax regime for discretionary trusts. This is an important shift from the position announced in the Federal Budget. At that time, the proposed reforms stated that testamentary discretionary trusts — particularly those created under Wills after Budget night — would be caught by the new tax rules ( Budget 2026–27 Tax Explainer ) . For many families, that would have materially reduced one of the major advantages of using a testamentary trust in a Will. What was announced in the Federal Budget? The original Budget proposal aimed to introduce a 30% minimum tax on discretionary trusts from 1 July 2028. The policy was designed to change the tax treatment of trust distributions and reduce the tax benefits commonly associated with discretionary trust structures. When first announced, testamentary discretionary trusts were included. That created uncertainty for estate planning, because testamentary trusts have long been used to provide asset protection, flexibility, and tax-effective income splitting for beneficiaries, particularly children and grandchildren. For many families, that Budget proposal would have undermined the very reason testamentary trusts are included in Wills. What has changed now? The Government has now indicated that testamentary trusts will be carved out from the proposed changes. In practical terms, that means testamentary trusts used for genuine testamentary purposes are expected to remain outside the new 30% minimum tax regime. That is a significant backdown. It restores much of the confidence that estate planning practitioners and clients have historically placed in testamentary discretionary trusts as a legitimate and valuable planning structure. This change is especially important because the original Budget position appeared to blur the distinction between ordinary discretionary trusts and testamentary trusts. The latest announcement suggests the Government has now recognised that those structures serve different purposes and should not necessarily be treated the same way. Why this matters for estate planning Testamentary discretionary trusts remain one of the most useful estate planning tools available in Australia. Properly structured, they can help families: protect inherited assets from relationship breakdowns, bankruptcy, and creditor claims. provide flexibility in how estate assets are managed and distributed. support children and grandchildren in a controlled and tax-effective way. preserve family wealth across generations. The latest announcement is particularly important because it preserves the role of testamentary trusts in achieving those objectives. If the Budget proposal had proceeded in its original form, the tax advantages of these trusts may have been significantly reduced, especially where beneficiaries are on lower marginal tax rates. A timely opportunity to review your Will The Government’s announcement has removed some of the immediate concern created by the Budget, but it has not removed the need for proper advice. Testamentary trusts remain a powerful and flexible estate planning tool, and the latest development reinforces the importance of getting the structure right from the outset. If you are considering a new Will, or if your existing Will includes a testamentary discretionary trust, now is a good time to review whether it still reflects your wishes, your family circumstances, and the current law. Crabtree Legal assists clients across Perth, Western Australia and Australia with Wills, testamentary trusts, estate and business succession planning. If you would like advice on whether your Will should be updated in light of the latest trust announcements, our team can help.
The Federal Budget announced on 12 May 2026 introduces a minimum 30% tax on certain discretionary trusts, but Testamentary Discretionary Trusts remain a powerful and practical Estate Planning tool for most families. What the Budget changed — quickly and clearly The Government has proposed a minimum 30% tax on the taxable income of discretionary trusts, to apply at trustee level from the legislation’s effective date as announced in the Budget. The measure is designed to limit income-splitting through discretionary trusts and to bring trust taxation closer to the taxation of other entities. Certain trusts and types of income are excluded from the measure — including Fixed Testamentary Trusts and Special Disability Trusts created by Wills, and income from assets of Testamentary Discretionary Trusts that existed at announcement time. The real headline you should read first Despite the headlines, Testamentary Discretionary Trusts remain a strong Estate-Planning choice — they still protect inheritances from relationship breakdowns and give your Executor and family the flexibility to manage distributions over time. Where a trust already distributes income to beneficiaries who pay tax at 30% or more, there will be no increase in the overall tax paid — the Budget’s minimum tax simply matches what those beneficiaries already pay. How the new tax will actually affect families For families that historically flowed trust income to low‑tax-rate beneficiaries (for example, children with little other income), the trustee-level 30% will increase tax payable unless the family’s overall tax position already sat at or above that rate. Non-corporate beneficiaries will receive non-refundable tax credits for tax paid by the trustee, which reduces the risk of double taxation though it does not create a refund if the beneficiary’s personal rate is lower than 30%. Why you should still consider a Testamentary Discretionary Trust ( TDT ) Protection from relationship breakdowns: A TDT ring‑fences the inheritance and makes it far harder for divorcing spouses or de facto partners to claim those assets directly. This protection is often the primary reason clients choose TDTs, and it is unaffected by the Budget change. Control and tailored distributions: TDTs let you set rules for how and when beneficiaries benefit — essential where beneficiaries are young, vulnerable, have special needs, or where blended families require careful balancing. Tax planning remains possible: Although some tax advantages may be reduced for low‑income beneficiaries, many families will see no net tax rise because distributions are already taxed at higher marginal rates. Even where there is more tax payable, the trade-off with asset protection and control can still make a TDT the better choice. Practical next steps for your Estate Plan Don’t panic — review, don’t rip up: If you already have a Will with a Testamentary Discretionary Trust, your plan may be unaffected depending on timing and how distributions are made; get tailored advice before taking action. If you are planning a new Will, speak to an advisor about how a TDT will sit alongside the announced minimum tax rules, whether rollover relief or restructuring options are relevant to you, and whether a Fixed Testamentary Trust or alternate structure may be preferable. Consider cashflow and timing: the trustee will pay tax at the trustee level, so trustees may need to allow for the timing of tax payments and the availability of credits to beneficiaries. A short illustration Family A distributes trust income largely to adult children who already pay tax at 32% — the imposition of a 30% trustee tax will not increase their family’s total tax burden. Family B distributes to low‑income minor children who pay little or no tax — Family B may face higher tax under the new rules. How Crabtree Legal can help At Crabtree Legal, we continue to recommend Testamentary Discretionary Trusts as a cornerstone of well-structured Estate Plans. If you are reviewing your Will or considering whether a Testamentary Discretionary Trust is appropriate for your circumstances, then we'd be happy to provide you with tailored advice.
A new year is the perfect time to revisit an important question: is your Will still up to date? Many people make a Will once and then leave it untouched for years. But life rarely stays still. Relationships change, children are born, assets are bought and sold, businesses evolve, and family circumstances shift. A Will that once reflected your wishes may no longer do so. For that reason, reviewing your Will regularly is one of the simplest ways to protect the people and assets that matter most. Why people delay updating their Will It is easy to put off Estate Planning. Some people assume their Will is “good enough” because nothing dramatic has happened. Others feel uncomfortable thinking about what happens after they are gone. In practice, the most common reason Wills become outdated is not neglect in a dramatic sense, but everyday change. You may have: Married or separated. Had children or grandchildren. Bought property. Started or sold a business. Gained or lost significant assets. Named an Executor who is no longer suitable or available. If any of these apply, your current Will may need review. What can happen if a Will is outdated An outdated Will can create confusion, delay, and conflict at exactly the moment your family is already dealing with loss. It may also fail to reflect your real intentions. For example, assets may pass to someone you no longer intended to benefit, or a chosen Executor may no longer be the right person to manage the Estate. In some cases, the wording of an old Will can even create disputes that could have been avoided with a simple update. When to review your Will A good rule of thumb is to review your Will after any major life event, and otherwise every few years. You should consider an update if you have experienced: A marriage, divorce, or de facto relationship change. The birth or adoption of children. A death in the family. A major change in assets or liabilities. A move interstate or overseas. A change in your wishes about guardianship for your children, gifts, or Executors. Even if nothing major has changed, a periodic review helps ensure your instructions remain clear and legally effective. A simple process can prevent future problems Updating a Will does not have to be complicated. In many cases, a short review with a lawyer is enough to confirm whether the existing document still works or whether a new will is needed. A proper review can also identify related issues, including: Powers of attorney. Appointment of guardians. Superannuation nominations. Business succession arrangements. Asset ownership structures. These matters often work together, so an estate plan should be considered as a whole rather than as a single document. The takeaway The start of a new year is a useful reminder to get organised, and your Will should be part of that process. If your circumstances have changed, or if it has been several years since your last review, now is a sensible time to take another look. A current, well-drafted Will can save your family stress later and help ensure your wishes are carried out clearly. Contact Crabtree Legal today for practical advice on updating your estate plan and protecting the people you care about most.