You’ve done the hard work. You’ve made the decision to downsize and sell the family home, you’re working through the financial implications and you’re preparing for the next chapter. But there’s one conversation that most downsizers put off, not because it isn’t important, but because it feels heavy.
Your estate plan.
Specifically, your Will, whether a Testamentary Trust is right for your family and the increasingly popular question of whether to pass on some of your inheritance now, rather than later.
These are not conversations to have after selling the family home. They are conversations to have alongside the sale process because selling the family home changes everything about your estate picture, often overnight.
Why selling your home triggers an Estate Planning Review
When you sell the family home that has been your primary residence for decades, the financial landscape of your estate shifts dramatically. The equity you release may be the single largest asset you hold. How that money is held, structured and eventually distributed matters enormously.
An outdated Will, one written before the children married, before grandchildren arrived, before superannuation balances grew, before the property was sold can create real problems for the people you love most.
An estate planning team helps clients with Wills, Testamentary Trusts, Powers of Attorney, Enduring Appointments of Guardian, Aged Care Directives and Superannuation Binding Death Benefit Nominations turning your vision into a clear, binding plan that protects your loved ones and reflects your wishes.
If you’re working with a buyers agent to find your next home, the window between sale and purchase is the ideal time to get this sorted. Not after the dust settles. Now.
What is a Testamentary Trust and do you need one?
A standard Will distributes your assets directly to your beneficiaries when you pass. A Testamentary Trust does something more sophisticated: it creates a trust structure within your Will that can hold and manage assets for your beneficiaries over time, rather than handing everything over in a lump sum at once.
For downsizers, this can be genuinely powerful.
Why families consider Testamentary Trusts:
- Tax efficiency for beneficiaries. Income distributed from a Testamentary Trust to minor beneficiaries (grandchildren, for example) can be taxed at adult marginal rates rather than penalty rates that normally apply to children’s unearned income. Over time, this can result in meaningful tax savings across the family.
- Asset protection. If an adult child is in a profession with liability risk, going through a divorce, or dealing with financial instability, assets held in a Testamentary Trust can offer protection that a direct inheritance cannot. A beneficiary’s creditors generally cannot access trust assets the same way they could a direct inheritance.
- Flexibility for complex families. Blended families, children with different financial circumstances, grandchildren with special needs. A Testamentary Trust can accommodate complexity that a standard Will cannot.
- Continuity and control. Rather than a lump sum that may be spent or lost, a Trust can distribute income regularly and preserve capital for future generations.
Not just for large estates
A Testamentary Trust isn’t just for high-net-worth estates, once you factor in superannuation, the sale proceeds from a family home and any other savings, many Newcastle downsizers have estates that would benefit significantly from this structure. The question is whether your family can afford not to have one.
It’s worth noting that a Testamentary Trust only takes effect after you pass. It sits inside your Will and is activated at that point, so setting one up now doesn’t affect how you live or access your assets today.
Checking your binding nominations, not just your Will
Updating your Will and setting up a Testamentary Trust is only half the picture. Superannuation and most life insurance policies sit outside your Will entirely and are governed by their own binding nomination. If that nomination isn’t structured correctly, a Testamentary Trust can end up doing nothing, because the super or insurance proceeds bypass the trust altogether and pay out directly to a nominated individual instead.
A financial planner is essential
This is where a financial planner’s role becomes essential alongside your solicitor’s. A financial planner can review your existing binding death benefit nominations to confirm they’re pointing “to your legal personal representative” rather than to a named individual, which ensures the proceeds flow into your estate and are then distributed according to your Will or Testamentary Trust, rather than skipping the structure entirely. They can also check whether your nomination is binding or non-binding, since a non-binding nomination gives the super fund trustee final discretion over who receives the payout and confirm the nomination hasn’t lapsed, since most binding nominations expire every three years and are easy to forget once set and left.
For downsizers updating their Will or setting up a Testamentary Trust alongside a property sale, this is a natural moment to have your financial planner cross-check your super and insurance nominations at the same time, so every piece of the plan actually works together rather than quietly working against itself.
The early gifting conversation
One of the most common questions Chad hears from downsizers once the sale proceeds land is some version of: “We’ve been thinking about giving the kids some of their inheritance now, while we can see them enjoy it.”
It’s a beautiful instinct. And it deserves a thorough, honest conversation because getting this wrong can have significant consequences.
The Centrelink gifting rules
If you receive, or plan to receive, the Age Pension, Centrelink has strict rules about how much you can give away without affecting your entitlements.
A person or a couple can dispose of assets of up to $10,000 each financial year, with an additional disposal limit of $30,000 over five financial years. If you exceed these limits, the amounts gifted outside these thresholds will be treated as a ‘deprived asset’ counted under the assets test and deemed under the income test.
The key point is that even though you no longer have the money, Centrelink will still count it as a deprived asset for five years from the date of the gift.
Timing it right
This matters a great deal for downsizers who release significant equity from selling the family home. Should a person wish to gift an amount of money, or transfer other assets such as bringing forward an inheritance, they may wish to consider doing this at least five years before making a claim for an Age Pension payment or benefit.
For a family helping adult children into the housing market, or passing on funds early, the timing and structure of any gift needs careful thought. The Services Australia gifting rules are available directly from the government and are worth reading alongside qualified financial and legal advice.
The aged care dimension
Gifting rules don’t disappear once you’re in aged care, they follow you in.
Gifts given within five years of a resident moving into aged care are assessed and where deprivation has occurred, this can mean the resident is required to pay a higher accommodation payment and/or care costs, even though their assets are lower. This can create a financial burden on the resident in aged care, as they may not be able to meet their aged care fees. The hardship safety net cannot be accessed if there has been excess gifting within five years.
This is a scenario that many downsizers simply don’t anticipate. It’s one of the reasons early, structured estate planning is so valuable because the decisions you make today have a long tail.
Early gifting done well
None of this means you shouldn’t share your wealth with your children or grandchildren. Many downsizers do exactly that and it can be deeply meaningful. Helping a grandchild with education costs, contributing to a house deposit, or simply knowing your legacy is at work while you’re still here to see it.
The key is doing it with eyes open. That means:
- Understanding your Centrelink position and how gifting affects it
- Considering loan structures instead of gifts where appropriate (a properly documented loan is treated differently by Centrelink than an outright gift)
- Getting legal advice on how to document transfers correctly
- Reviewing your Will and Testamentary Trust alongside any gifting decisions, so that what you give now doesn’t create inequity or confusion later
The families who handle this well are the ones who have the conversations early. They sit down with a lawyer and a financial adviser, they map out what they want to achieve and they structure it properly. The families who struggle are the ones who make large gifts informally and then find out later that those decisions had consequences they didn’t expect.
Why now is the right time
Selling the family home is one of life’s major financial events. It’s the moment when your asset position is most visible, most liquid and most in transition.
From Chad’s experience working exclusively for buyers across Newcastle, Lake Macquarie, Port Stephens and the Hunter Valley, this transition period is when the smartest downsizers do the most planning, not just about the property itself, but about what the move means for everything else.
An updated Will and a conversation about Testamentary Trusts take a matter of weeks to complete. The peace of mind they provide lasts a lifetime and protects the people you’ve spent that lifetime building a future for.
Getting the right advice
Estate planning sits at the intersection of law, tax and financial advice. You’ll want qualified professionals in all three areas:
- A solicitor for your Will and Testamentary Trust.
- A financial adviser for the Centrelink and aged care implications of gifting, particularly one with experience in retirement-phase advice. MoneySmart’s guidance on estate planning is also a helpful starting point.
- A buyers agent to ensure the property side of your move is handled by someone working exclusively for you, not split between buyer and seller interests.
These three pieces work together. The property decision, the legal structure and the financial plan are not separate conversations. They’re one conversation and the best time to have it is now.
AcquiredHQ was built in Newcastle, not relocated here, not expanded here. While national agencies open satellite offices and borderless buyers agents fly in on weekends, our team lives, works and negotiates in this market every single day. We know these suburbs because we move through them constantly, not because an algorithm told us to. Every client works directly with an experienced buyers agent from first call to settlement and we’re here for the long term. Building a business on results, relationships and a buying experience that people genuinely talk about.