Inheritance planning is the work of deciding what should pass, to whom, under what control and with what financial preparation.  

A will is central, but it may not control super, jointly owned assets, trusts, companies or insurance.

The strongest plans coordinate legal documents, tax records, beneficiary nominations, liquidity and family communication.

Australia has no general inheritance or estate tax. That does not make an inheritance tax-free in every practical sense.  

Capital gains tax may arise when inherited assets are later sold, income produced by those assets may be taxable, and super death benefits can be taxed differently depending on the recipient and benefit components.

What a will may and may not control

Asset or interest Typical control point What to check
Assets owned solely in your name Will and estate administration Current will, executor, specific gifts, residue and liquidity
Jointly owned assets Ownership form and survivorship rules Whether ownership is joint or in defined shares
Super and insurance inside super Fund rules and beneficiary nomination Validity, expiry, eligible recipients and tax
Family trust Trust deed and succession of control Appointor, trustee, successor and distribution powers
Company interests Will, constitution and shareholder agreement Transfer restrictions, buy-sell terms and control
Life insurance outside super Policy ownership and nomination Beneficiary, estate liquidity and policy terms
Digital assets Platform terms, ownership and access plan Authority, records and secure instructions

The exact result is legal and fact-specific. An estate-planning lawyer should confirm it.

No general inheritance tax does not mean no tax issues

The ATO states that Australia has no inheritance or estate taxes. A beneficiary may still face:

  • CGT when an inherited asset is later disposed of;
  • income tax on rent, dividends, interest or other income after inheritance;
  • different cost-base rules depending on when and how the deceased acquired the asset;
  • tax within a deceased estate during administration;
  • tax on a super death benefit; and
  • cross-border tax where the deceased, beneficiary or asset is connected with another country.

Good records can materially affect future tax calculations. Preserve purchase dates, cost bases, improvements, ownership changes, valuations and tax elections for property, shares and other assets.

Super needs its own plan

Super does not automatically form part of your estate. The fund trustee applies super law, the fund rules and any valid beneficiary nomination.

Common nomination types include:

  • binding nominations;
  • non-binding nominations;
  • reversionary pension nominations; and
  • nomination of the legal personal representative, which directs the benefit towards the estate if valid.

Fund rules vary. Some binding nominations lapse; others may remain until changed. Eligible recipients under super law are not necessarily the same as everyone named in a will.

Tax law also uses a specific definition of a death-benefits dependent. A lump sum paid to a qualifying dependent can receive different tax treatment from a taxable component paid to an adult child who is not a tax dependent.

Review the nomination with the will rather than completing it as a separate administration task.

The six-part inheritance plan

1. Intent

Write down the outcome before choosing structures. Consider:

  • equal amounts versus equitable support;
  • lifetime gifts versus transfer on death;
  • income for a spouse;
  • protection for minors or vulnerable beneficiaries;
  • business continuity;
  • charitable gifts; and
  • the family home, sentimental assets and digital property.

Equal division can still create practical conflict if one beneficiary receives an illiquid business and another receives cash.

2. Control

Decide who will make decisions if you cannot. This can include:

  • executor;
  • enduring power of attorney;
  • enduring guardian or medical decision-maker, depending on the state or territory;
  • trustee of a testamentary trust;
  • successor appointor or trustee for an existing trust;
  • director or successor under company arrangements; and
  • person authorised to manage digital records.

Choose for capability and trust, not only family position. Name backups where the legal structure permits.

3. Liquidity

An estate may hold valuable assets but insufficient cash for tax, debt, expenses, equalisation or business obligations. Map:

  • mortgages and guarantees;
  • tax and administration costs;
  • business buy-sell funding;
  • insurance proceeds;
  • cash reserves;
  • assets that may need to be sold; and
  • timing before beneficiaries receive distributions.

Liquidity planning can prevent a rushed sale, but insurance or cash levels should be based on personal analysis.

4. Tax and records

Ask a registered tax agent to identify likely cost-base and tax issues. Keep records where the executor can find them without compromising security.

For inherited property and shares, beneficiaries may need the deceased's acquisition records or a date-of-death valuation. Missing information can create cost and uncertainty years later.

5. Beneficiary readiness

An inheritance can change housing, work, relationships, tax and investment risk. Decide how much explanation or support is appropriate.

For a substantial transfer, beneficiaries may benefit from:

  • a clear summary of the estate process;
  • access to tax and legal advice;
  • a period before major investment decisions;
  • an agreed cash reserve;
  • education about trusts, business interests or property; and
  • protection from high-pressure requests and scams.

Do not make a beneficiary's financial plan without involving them where appropriate.

6. Review

Review after marriage, separation, birth, death, incapacity, a business transaction, a large asset purchase, a move interstate or overseas, or a material change to super.

A calendar review can also catch expired nominations and people appointed to roles they can no longer perform.

Passing on a business or concentrated asset

A family business, farm or large property needs more than an allocation in a will. Questions include:

  • Who wants and is capable of owning or operating it?
  • Can one beneficiary afford to buy out others?
  • How will value be established?
  • What happens if the owner becomes incapacitated before death?
  • Are shareholder, partnership and trust documents aligned?
  • Is there enough liquidity to avoid a forced sale?
  • How are guarantees, loans and tax liabilities handled?

A current succession plan, identification and preparation of the successor, regular valuation and documented processes should be considered. The succession and estate plans should use the same assumptions.

If you are receiving an inheritance

The first step is usually to understand, not invest.

A practical first-90-days checklist

  • Confirm what has been received and what remains in the estate.
  • Retain executor statements, valuations and cost-base records.
  • Set aside amounts for confirmed tax or obligations.
  • Place cash securely within applicable banking and ownership arrangements.
  • Avoid irreversible gifts, property purchases or complex products while information is incomplete.
  • Update your personal balance sheet, goals and estate documents.
  • Ask a tax agent about income, CGT and any foreign issues.
  • Decide which debts, goals and investments deserve attention in a written order.

There is no universal waiting period. The principle is to separate urgent administration from decisions that can be made with a complete view.

A hypothetical family

Consider parents who want their adult children to benefit equally. Their wealth includes super, a family company, the home and an investment property. One child works in the company and the other does not.

A simple 50:50 will does not settle:

  • who controls the company;
  • how the non-working child receives equivalent value;
  • whether the company can fund a buyout;
  • where super is paid;
  • the tax difference between assets;
  • who manages affairs on incapacity; or
  • whether the investment property must be sold.

The family needs coordinated legal, tax, valuation and financial advice. The example is illustrative only.

Who should be involved?

Professional Primary role
Estate-planning lawyer Will, powers, trusts, ownership, nominations and legal control
Registered tax agent Estate, CGT, other tax considerations and cross-border tax issues
Financial adviser Cash flow, insurance, super, investments, beneficiary readiness and coordination
Business valuer or succession specialist Business value, transfer pathway and continuity
Super fund Nomination forms, eligibility, pension and benefit process

No single document or professional covers the entire plan.

Your next action list

  1. Create an asset and control map.
  2. Check the ownership of each material asset.
  3. Ask your super funds for current nomination details.
  4. Locate cost-base and valuation records.
  5. Review your will, enduring powers of attorney and guardianship, and trust or company succession with a lawyer.
  6. Test estate liquidity and beneficiary outcomes.
  7. Record who owns each action across the professional team.
  8. Agree on a review trigger and date.

Coordinate the wealth and the documents

Our expert Sydney-based financial advisers can help you connect your financial position, super, insurance and family goals with the legal and tax work completed by your lawyer and accountant.

Arrange a family wealth planning conversation

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This article contains general information only. It does not take into account your objectives, financial situation or needs and is not tax or legal advice. Estate, super and tax outcomes depend on ownership, documents, relationships and applicable law. Obtain specialist advice for your circumstances.