September Update | The Trust That Just Became More Valuable, What's Changed for Spring Sellers & Wealth Locker

Market Update: The RBA's September Decision

The Reserve Bank has raised the cash rate by 0.25%, from 4.35% to 4.60%. Inflation has run above target for longer than expected, and the Bank has judged that another increase is needed to bring it back under control.

For borrowers, this is another rise to plan around rather than wait out, it's worth checking your loan is still competitive and your fixed-versus-variable mix still suits your position. For those holding cash and term deposits, returns continue to improve.

 

Message from the Team

There's a theme running through this edition: the details that are easy to miss, until they matter.

Here's what we're covering this month:

●       A trust structure that's just become more valuable for passing on wealth tax effectively, but only if your Will is set up for it

●       What's changed for spring property sellers, and an option many eligible people forget about entirely

●       The window to balance super between partners before it closes

●       A death benefit nomination that may have already lapsed without you knowing

●       A client claim worth sharing

●       One cost you can lock in and control, even while your mortgage repayments move

As always, the focus is on what these changes actually mean for you, and where a conversation now could make a real difference later.

 

Feature Insight: The Trust Structure That Just Became More Valuable

If you're planning to leave money to grandchildren, or to children who are still minors, there's a structure worth understanding properly, because it just became one of the few trust types protected from the new rules everyone's been asking us about.

Ordinarily, income a minor receives from a trust is taxed harshly. Under what's known as the Division 6AA penalty rate, a child can face tax of close to 66% on unearned income above a very low threshold, a rule designed to stop parents shifting investment income into a child's name purely to save tax.

A testamentary trust, a trust created by your Will rather than during your lifetime, is treated differently. Income distributed to a minor beneficiary through a testamentary trust is taxed at ordinary adult rates, including the full tax-free threshold of $18,200. For a family leaving a meaningful inheritance to grandchildren, or structuring a Will so children are provided for over time rather than all at once, that difference can be worth tens of thousands of dollars.

Here's what makes this particularly timely. The Budget handed down on 12 May introduced a new 30% minimum tax on discretionary trusts, a change we covered when it was announced. The government has since confirmed that testamentary trusts, including discretionary ones established for genuine purposes, are exempt from that minimum tax entirely. At a time when trust structures generally are facing more scrutiny and less favourable treatment, testamentary trusts stand out as one of the few that hasn't been touched.

One important catch: a testamentary trust can only be created if your Will specifically allows for it. It isn't automatic. In practice, there are two types of Wills, a standard Will, which most people have, and a Will drafted to include testamentary trust provisions. If yours is the standard kind, this structure simply isn't available to your estate, no matter how much you're leaving behind.

This isn't a strategy that suits everyone, and it needs to be built into your Will properly, not added as an afterthought. If you care about passing on wealth in a tax effective way, rather than handing it over outright, it's worth a conversation with our team.

 

The Lakeside Lens: Selling This Spring? What's Changed, and What's Easy to Forget

For anyone thinking about buying or selling property this spring, two changes are worth knowing before you go to market.

The first is regulatory. From 1 October, Victorian agents must publish a single, clear reserve price at least seven days before an auction. The vague ranges buyers have grown used to, “offers over,” “$1.2 to $1.3 million”, are being phased out, and if a reserve isn't published in time, the auction can't proceed. It's a significant shift aimed at underquoting, and it lands in a market that's already noticeably quieter than last spring, with auction volumes down sharply on the same period in 2025. For sellers, that combination, more transparency and less competitive tension, means pricing expectations may need to be more realistic than they were twelve months ago.

The second isn't new, but it's easy to forget. The downsizer contribution has been around since 2018, and the age threshold dropped to 55 back in January 2023, so it applies to a lot more people than it used to. If you're 55 or over and you've owned your home for at least 10 years, you can place up to $300,000 each, or $600,000 for a couple, from the sale proceeds straight into superannuation. It sits entirely outside the usual contribution caps, there's no work test to satisfy, and the tax treatment is favourable, but there's a hard deadline, the contribution must be made within 90 days of settlement. For clients weighing up a move into a smaller home, this is often one of the most efficient ways to strengthen a retirement position, and it's easy to miss if it isn't planned for in advance.

 

Balancing Super Between Partners

If you made concessional, before-tax, super contributions during the 2025-26 financial year, you now have a window to split some of them with your spouse. The application period runs from 1 July 2026 through to 30 June 2027, and you can split whichever is lower, 85% of last year's concessional contributions, or the concessional cap of $32,500.

Your spouse needs to be under 60, or between 60 and 65 and not yet retired, and the split applies only to contributions already made.

Evening up super balances between partners has long been sensible for retirement income planning. But with Division 296 now in effect, taxing earnings on balances above $3 million (a change we walked through in detail back in May, now confirmed to apply only to realised earnings, with both thresholds indexed), it's taken on a second purpose. Couples where one partner's balance is tracking well ahead of the other may find that splitting contributions each year is a straightforward way to keep both of you further from that threshold, rather than concentrating the exposure with one partner alone.

 

The Lakeside Check-In: Has Your Death Benefit Nomination Already Lapsed?

Here's one that catches even well-organised clients out. A binding death benefit nomination on your super, the instruction telling your fund exactly who should receive your balance if you die, isn't permanent. Most binding nominations lapse after three years unless actively renewed.

Once a nomination lapses, it stops being binding. Your fund can still take it into account, but it's no longer obliged to follow it, which can mean your super ends up somewhere other than where you intended. A recent industry review found many funds only send a single reminder before a nomination lapses, sometimes only days before the expiry date.

It's a five-minute check with real consequences attached. And while you're at it, it's worth thinking about your Will too. If you've been with us a long time and had your Will done years ago, a new relationship, children, grandchildren, or a business since then can all mean it no longer reflects what you'd actually want. If it's been a while, now's a good time to book in and take another look.

 

Client Story of the Month

Sometimes the most valuable thing an adviser does is ask a question a client would never think to raise themselves.

During a routine check-in, Jack, one of our advisers, asked whether the client had experienced any fractures or hospital stays recently. The client said yes, an elbow, a while back, nothing he'd thought to claim on. Jack reviewed the policy and found it included a Fractures and Specified Injury Benefit, paying out at twice the benefit rate for a fracture like his. The claim went through as $68,000.

It's a good reminder that sometimes the most valuable thing an adviser does is simply ask, and follow through.

 

The Lakeside Lens: One Cost You Can Control

If you're taking out a mortgage right now, your repayments are going to move with interest rates, that's largely out of your hands. But if you're also at the right age for life insurance, there's a cost you can lock in and control completely.

When you take out life insurance, you choose between two ways the premium is worked out. A stepped premium starts lower, but it's recalculated every year based on your age, so it rises each and every year, and those rises get steeper the older you get. A level premium costs more from the start, but it's locked in, the same premium year after year, regardless of age. Over a full lifetime, locking in level cover from age 27 can work out to be around 80% cheaper in total than stepped.

The window where level comes out ahead is narrower than people think, generally taken out between 27 and 30. Get the timing right, and you've secured a premium that won't move for decades, right when your mortgage repayment is the one thing that will. Leave it too late, and stepped is often still the smarter option, it really comes down to age and timeframe, not which sounds better on paper.

What catches people out is rarely the decision itself, it's that nobody models what a stepped premium actually looks like twenty or thirty years down the track, only what it costs today.

If you're buying your first home in that 27 to 30 window, or your kids are, it's worth having this conversation alongside the mortgage one, not after it. Get in touch and we'll book you in for a review.

 

The Whole Picture, in One Place

Much of what we've covered this month comes back to the same idea, the details matter, and they're easy to miss without someone actively looking for them. That's exactly the gap Wealth Locker was built to close.

Your insurance, super, loan details, Will and estate documents all live securely in one place, with alerts before something lapses or a gap opens up. It's free to our community for the rest of 2026.

Simply reach out and we'll populate your Wealth Locker with the information we already hold on file, your insurances, your Wills, whatever we have, then send through your login details so you can log in and take it from there.

A look inside Wealth Locker:

 

Here to Help

Between a shifting property market, this year's super contribution-splitting window and a trust structure worth another look, there's a lot in this edition that could apply to your situation. If anything here raises a question, please get in touch, we'd be very happy to talk it through.

Warm regards,

The Lakeside Financial Team