If you manage portfolios for Asian families in Australia as a wealth manager, private banker or financial adviser, you may be the first to notice when the estate plan does not match the portfolio: a Will that has not been updated in years, a credit facility secured over the investments, or a client whose children live in Singapore and Shanghai.
This article is written for you. It outlines, in general terms, the Australian legal issues that arise where estate planning meets portfolio management, and how a lawyer and an adviser can each stay within their role while working toward one plan. We have written separately about super death benefit nominations, and an earlier checklist for overseas advisers covers Wills, foreign grants and cross-border tax at a broader level.
Portfolios pledged as security
Many high-net-worth clients borrow against their portfolios through margin lending, a private bank credit line, or a facility that also funds property or a family business.
A facility may treat death or incapacity as an event of default or a trigger for review. The executor may have limited authority to deal with the account until a grant of probate is obtained, while markets keep moving and margin calls may still be made. Where a family company or relative has guaranteed the facility, that guarantee may survive the client. The questions for the planning stage are what the facility documents say, who could act quickly, and whether the estate would be forced to sell at a poor time.
Liquidity for tax, debts and equalisation
An estate can be asset-rich and cash-poor. Debts, tax, legal costs and gifts of cash all need liquidity, and executors may have to choose which assets to sell. For families with a business or property that will go to one child, the portfolio is often what is expected to balance the outcome for the others. If the portfolio is pledged, concentrated or overseas, that plan may not work. Our article on estate liquidity for wealthy families explores this.
Capital gains tax on death and the 2027 reform
Australia has no inheritance tax, but capital gains tax rules apply when assets pass through an estate. In general, death itself may not crystallise a gain, and the beneficiary may inherit the deceased’s cost base, but a sale by the executor can be taxed in the estate, and assets passing to a beneficiary who is not an Australian tax resident can be treated differently.
The CGT changes legislated in 2026 apply to gains accruing from 1 July 2027, with indexation replacing the discount for many taxpayers and a minimum tax on certain gains. How the new rules apply to inherited assets is still being settled through later stages and guidance. Advisers may wish to discuss with clients and their accountants what records of value will be needed. Tax advice should come from a qualified tax adviser working with the lawyer.
Testamentary trusts with investment mandates
A testamentary trust created by a Will can hold a portfolio for children or grandchildren, with potential tax and protective advantages depending on the facts. Proposals before Parliament on a minimum tax for discretionary trusts would exclude genuine testamentary trusts, subject to conditions; those proposals are not yet law.
For advisers, the drafting matters. A Will can set the trustee’s investment powers, allow the appointment of an investment manager, provide for an adviser to be consulted, and say how risk should be balanced between a surviving spouse who needs income and children who will receive the capital. A letter of wishes can explain the family’s investment philosophy, though it usually does not bind the trustee.
Investment powers of trustees and attorneys
In Victoria, the Trustee Act 1958 (Vic) gives trustees a general power to invest, subject to the trust instrument, together with duties of care and a list of matters the trustee must consider, such as diversification and risk. A trustee may use professional managers but generally cannot hand over its discretion altogether.
An attorney under a Victorian enduring power of attorney must act honestly, diligently and in good faith, with reasonable care, avoid conflicts, keep the principal’s property separate and keep records. An attorney who is also a beneficiary of the principal’s Will may face difficult conflicts when deciding what to sell.
Powers of attorney and offshore accounts
When a client loses capacity, the platform or bank needs a document it will accept. An Australian bank may not act on a power of attorney made in Hong Kong, Singapore or Malaysia, and an Australian document may not be accepted by a bank overseas. Many families with accounts in several countries hold separate powers of attorney for each. Executors also need to find offshore accounts, which may require a local grant or resealing abroad. Australian tax residents are taxed on worldwide income, and offshore account information is exchanged under the Common Reporting Standard. Our articles on powers of attorney for foreign clients and on CRS reporting explain these issues.
Dividing the roles
Under the Corporations Act 2001 (Cth), advice given by a lawyer in their professional capacity about matters of law is not financial product advice. Lawyers do not recommend products or make portfolio decisions. Equally, advisers should not draft legal documents or advise on the effect of a Will, trust deed or power of attorney. The adviser keeps responsibility for the investment strategy; the lawyer deals with the documents that govern who controls and receives the assets.
How we work with you
Advisers can refer clients for a review, a new plan or a specific question. We act for the client, not the adviser, and we share our advice with you only with the client’s written consent. Where the client agrees, we coordinate with you and the client’s accountant so the documents, the investment strategy and the tax position fit together. We advise in English, Mandarin and Cantonese, and work with lawyers in Asia on offshore assets. Timing depends on the matter, and we discuss it with the client at the outset.
Questions your clients should be asking
- What do my credit facility and any guarantees say about death or incapacity?
- Will my estate have enough liquidity without a forced sale?
- Does my Will set investment powers for any testamentary trust?
- Who would manage my portfolio if I lost capacity, and would every bank and platform accept their authority?
- Are my offshore accounts covered by my estate plan?
- Have my lawyer, adviser and accountant compared notes?
Frequently asked questions
What happens to a margin loan when the borrower dies in Australia?
It depends on the loan terms. The lender may require the estate to repay or reduce the loan, and the executor may be limited in what they can do before probate. The facility documents should be reviewed in advance.
Can a testamentary trust appoint a financial adviser?
A Will can give the trustee power to engage investment managers or advisers and can set out how they are to be used. The trustee usually remains responsible for its own decisions.
Will an Australian bank accept a Hong Kong power of attorney?
Not necessarily. Acceptance depends on the institution, the document and the law that applies. Many families make separate documents for each country.
Every family’s situation is different, and the answer often turns on details. Book a consultation so we can review your documents and circumstances before you act.
How Chua Tan Associates can help
Chua Tan Associates has practised in Melbourne since 1990 and works with wealth managers, private bankers and financial advisers whose clients are Asian families with assets in Australia and overseas. We prepare Wills with testamentary trusts, enduring powers of attorney and estate plans designed to work with the client’s portfolio and lending. Justin Chua trained in accounting (Bachelor of Commerce, accounting major), is an affiliate member of STEP (the Society of Trust and Estate Practitioners), and advises on the legal and tax structure of family wealth together. He is a Nationally Accredited Mediator and Family Dispute Resolution Practitioner, and an Accredited Family Business Advisor. We work with the client’s accountant and with lawyers in Asia, our notary public prepares documents for use overseas, and we advise in English, Mandarin and Cantonese.
Important: This article is general information only and must not be relied on. It is not legal, tax or financial advice, does not take your circumstances into account, and may not reflect changes in the law after publication. Laws of other countries may also apply. Do not act or refrain from acting on the basis of this article. Reading it or contacting us does not create a lawyer–client relationship. Please book a consultation for advice on your situation.
Related reading
Chua Tan Associates acts for families, executors, trustees and their professional advisers in estate planning, estate administration and estate disputes in Australia and across borders. To arrange a confidential consultation, please contact our Melbourne office on +61 3 9602 3988 or submit an enquiry. Advice is available in English, Mandarin and Cantonese.
Justin Chua (蔡智勋), lawyer and mediator, Chua Tan Associates, Melbourne. General information only, not legal or tax advice.
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