Family trust elections offer considerable benefits to family groups. However, the consequences for getting it wrong – family trust distribution tax at 47% plus the general interest charge – are dire. Adding to the mix is that family trust elections are an area of ATO focus.

Testamentary trusts have been a popular estate planning tool for many years and their benefit in providing excepted trust income is widely understood. With more of these trusts coming into operation every year, we are seeing a number of issues arise.

Succession disputes are more likely to arise in blended families. If you have clients with a blended family, they need to be aware of this risk and carefully consider issues that may arise.