Many first-generation Asian families in Australia built their wealth the same way: a business that funded one property, then another, and over the decades a portfolio of homes, apartments, shops and land, often spread across Australia and the family’s country of origin. The founder knows every tenant, every mortgage and every renovation. The question that eventually arrives is a hard one: who will look after all of this when the founder no longer can?
In many families the answer is uneven. One child runs the family business and is comfortable dealing with agents, banks and builders. The other children have their own careers, may live overseas, and have no wish to manage property. They still expect to share fairly in the family’s wealth. Planning for this situation well can keep the portfolio intact and the family on speaking terms. Planning for it badly, or not at all, often leads to forced sales and disputes.
Why “equal shares of everything” often does not work
A common starting point is a will that leaves the whole estate to the children equally. For cash and shares this is usually straightforward. For a property portfolio it can create real problems:
- Properties left to several children jointly need everyone to agree on leasing, repairs, refinancing and sale. One reluctant or distant sibling can stall decisions.
- A child who wants cash may press for a sale at the wrong time in the market, while the managing child wants to hold.
- The child who does the work of managing may feel undervalued if they receive the same share as siblings who do nothing, while the passive siblings may suspect the manager of favouring themselves.
- If co-owners cannot agree, a court can generally be asked to order a sale of jointly owned land, which is costly and usually the outcome nobody wanted.
Equal value does not have to mean equal ownership of every asset. Fairness can be achieved by different means.
Start with the long-term objective
Before choosing any structure, the founder should be clear about what the portfolio is for. Some founders want the properties held for generations as a source of income and family identity. Others are content for the portfolio to be sold over time if the price is right, with the proceeds shared. Many sit somewhere in between: certain properties should never be sold, others are purely investments.
It helps to write these objectives down and to discuss them with the children. A structure designed to hold assets for fifty years looks quite different from one designed to sell well over the next ten.
Separate sentimental assets from investment assets
The family home, the first shop the founder bought, or a property in the ancestral hometown often carries meaning that has nothing to do with yield. These sentimental assets are frequently the ones families fight over. It is usually wise to deal with them separately and expressly, for example by leaving the family home to a particular child, giving siblings a right of first refusal, or setting out clear rules about whether and when it can be sold.
Investment properties can then be planned for on commercial terms: return, risk, debt, management effort and tax.
Plan by asset class, not one trust for everything
A frequent mistake is to place every asset into one structure and hope it works. A more resilient approach is usually to look at each class of asset on its own terms:
- Liquid investments (cash, listed shares, managed funds) can generally be divided easily and are often used to balance out what each child receives.
- Real estate raises issues of management, borrowing, land tax and stamp duty, and suits structures with a clear decision-maker.
- An operating business needs continuity of control and is often better left with the child who runs it, with others compensated in other ways.
Each asset class may end up in a different structure, with different people in control.
Options for passing on the portfolio
There is no single right answer. Common options include:
- Leaving properties to the children jointly. Simple to draft, but often leads to sale or dispute for the reasons above. It can work where siblings are close and in agreement, especially if the will or a co-ownership agreement sets out decision-making and exit rules.
- Allocating specific properties to specific children. Each child receives particular properties of roughly equal value. This avoids co-ownership, but values change over time and the will needs to deal with properties sold or bought before death.
- A family trust or company with one child as manager. The managing child acts as a director of the corporate trustee or of the company and runs the portfolio. The other children are beneficiaries or shareholders who receive income or dividends under an agreed distribution or dividend policy, without day-to-day involvement. Clear rules on remuneration for the manager, reporting to siblings, borrowing limits and sale decisions are essential.
- Testamentary trusts. A will can establish one or more trusts that come into existence on death, each with a chosen trustee. These may offer asset protection and, in some circumstances, tax flexibility for income distributed to family members, including minors, subject to conditions.
- Buy-out mechanisms. The will or a family agreement can give the managing child an option to buy out siblings’ interests at market value, within a set time and on agreed payment terms. This lets those who want cash exit fairly while the portfolio stays together.
Often the answer combines several of these, for example leaving the family home to one child, investment properties in a structure run by the managing child, and liquid investments to balance the shares of the others.
Australian tax and stamp duty touchpoints
Tax and duty are not reasons to plan on their own, but they shape which options make sense. In general terms:
- No inheritance tax. Australia does not currently impose an inheritance or estate tax. That does not mean death is tax-free for property.
- Capital gains tax is generally deferred, not removed. When a person dies, a capital gain on assets passing to their executor or beneficiaries is generally disregarded at that time. For assets the deceased acquired on or after 20 September 1985, the beneficiary generally inherits the deceased’s cost base, so the gain accrued during the founder’s life may be taxed when the beneficiary later sells. Assets acquired before 20 September 1985 have generally been treated as acquired by the beneficiary at market value at the date of death, but under the capital gains tax reforms passed in 2026 these assets are treated as reacquired at market value on 1 July 2027, so growth after that date can be taxed. Special rules may apply to the main residence.
- Capital gains tax reforms from 1 July 2027. For Australian residents, the 50% CGT discount is replaced by inflation indexation of the cost base, and a minimum 30% tax applies to capital gains. Gains accrued before 1 July 2027 generally keep the old treatment, so a market valuation of each property at that date may be worth obtaining. Separately, from 1 July 2027, rental losses on established dwellings bought after 12 May 2026 will generally only be deductible against residential property income.
- Proposed minimum tax on discretionary trusts. The Government has proposed a 30% minimum tax on discretionary trusts from 1 July 2028. Under the draft law released in September 2026, deceased estates and genuine testamentary trusts are generally excluded, but the rules are not yet final. Wills should give executors flexibility to choose the right structure at the time of death.
- Foreign-resident beneficiaries. Where an asset passes to a beneficiary who is a foreign resident for tax purposes, capital gains tax may be triggered in the deceased’s final tax return for some assets. Broadly, this concern applies to assets that are not “taxable Australian property”; Australian real estate is generally taxable Australian property, but other assets such as shares and overseas property may be treated differently. This needs specific advice where children live overseas.
- Stamp duty. Each state and territory has its own duty rules. Many provide concessions for transfers of land to beneficiaries under a will, but the scope of those concessions varies by state. By contrast, transferring properties into a trust or company during the founder’s lifetime will usually attract duty at full rates, and sometimes surcharge duty. Protecting the stamp duty position should be a core part of the plan, and sometimes means leaving properties to pass under the will rather than restructuring them now.
- Land tax. Land tax is also state-based. Some states impose higher rates or surcharges on land held in trusts, and on land owned by foreign persons or by trusts that are treated as foreign. Moving properties into a trust or company may therefore increase annual land tax, and the trust deed may need to exclude foreign beneficiaries to avoid a surcharge in some states.
Overseas properties are subject to the laws and taxes of the country where they are located, and may need a separate will or local arrangements. We are lawyers, not tax advisers. We work alongside the family’s accountant or tax adviser, and overseas lawyers where needed, and we recommend that tax advice is obtained before any property is transferred or restructured.
Implement in phases
A founder in their seventies may feel pressure to settle everything at once. In practice, good succession plans for property portfolios usually unfold over years. A phased approach might be:
- Update the will and enduring powers of attorney now, so there is a sound plan if something happens tomorrow.
- Gradually involve the managing child in the portfolio, so they learn the tenants, lenders and agents while the founder is still available.
- Restructure selected assets where the tax and duty cost is acceptable, rather than moving everything at once.
- Revisit the plan as properties are bought or sold, as children marry, separate or move overseas, and as laws change.
Structures should allow flexibility. A trust with a well-drafted power to appoint successor trustees, or a company constitution with sensible share transfer rules, can adapt as the family changes.
Letters of wishes and regular review
A letter of wishes is a non-binding document that explains to executors and trustees what the founder hopes will happen, for example which properties should be held long-term or how the managing child should be rewarded. It cannot override the will or trust deed, but it gives valuable guidance and can reduce misunderstanding among siblings.
A will is not a document to sign and forget. It should be reviewed whenever there is a significant change in assets, family circumstances or residence, and generally every few years in any event.
Composite example (anonymised and hypothetical)
This example combines features of situations commonly seen in practice. It does not describe any real family.
Mr and Mrs T came to Melbourne from Southeast Asia in the 1980s. They own their family home, eight investment properties in Victoria and New South Wales, two shops in their home country and a share portfolio. Their elder son runs the family import business and manages the rentals. Their daughter is a doctor in Sydney, and their younger son lives in Singapore.
After several family meetings, the plan that emerged was: the family home to pass to the daughter, who has young children and wants to keep it, with her brothers holding a right of first refusal if she sells; the investment properties to pass under the will into a testamentary trust with the elder son as trustee and all three children as beneficiaries, subject to a distribution policy and annual reporting; the elder son to keep the import business; and shares used to balance values. Because the younger son is a foreign resident for tax purposes, the family’s tax adviser was asked to review the capital gains tax and land tax effect of his interest, including whether the trust deed should limit foreign beneficiaries. Properties were not moved into a trust during the parents’ lifetime, as the stamp duty cost would have been significant. The will is reviewed every two years.
Frequently asked questions
Is it unfair to give one child control of the property portfolio?
Not necessarily. Control and benefit can be separated. One child may manage the properties while all children share in the income and capital according to agreed rules. Fairness is usually achieved through transparency, reporting and an agreed exit or buy-out mechanism, rather than by giving everyone an equal vote on every decision.
Should we transfer our properties into a family trust now to avoid problems later?
Not without careful advice. Transfers during your lifetime may trigger capital gains tax and will usually attract stamp duty, and some states impose land tax surcharges on trusts. In many cases, it may be more efficient to leave properties to pass under a well-drafted will, possibly into a testamentary trust. The right answer depends on the state where the properties are located, the size of the portfolio and the family’s tax position.
What happens if one of our children lives overseas?
A child who is a foreign resident for tax purposes may affect the tax treatment of some assets at death, and may affect land tax and duty if they become a beneficiary of a trust holding Australian land. These issues can generally be managed with planning, but they should be identified early and reviewed with a tax adviser.
How Chua Tan Associates can help
Chua Tan Associates advises families across Australia on wills, testamentary trusts, family trusts and succession planning, and works closely with families’ tax advisers and with lawyers overseas where assets or family members are located in other countries. Justin Chua is a Nationally Accredited Mediator and Family Dispute Resolution Practitioner, and an Accredited Family Business Advisor, and can help families hold the difficult conversations that property succession often requires. We advise in English, Mandarin and Cantonese.
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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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