To leave an inheritance to your daughter but not your son-in-law, use a testamentary trust in your Will, naming your daughter as beneficiary but restricting the son-in-law's access, often by appointing a trustee to manage funds or specifying distributions for your daughter's needs (like education, health). Other methods include prenuptial/postnuptial agreements or making lifetime gifts with conditions, but a well-drafted trust offers strong, long-term protection against divorce claims, and you should consult a wills and estates lawyer for your specific situation.
A Binding Financial Agreement attempting to exclude assets that are inherited in the future or which exist at the commencement of the relationship is a good starting point. It can be difficult to convince people in the sunshine of a new relationship to consider what happens should it break down though.
If you die without a Will the rules of intestacy would apply. It is therefore imperative for you to make a Will if you wish your children to benefit from your half of the property. In the Will you can gift your share of the property to them and give your husband a right of occupation until his death.
Using Trusts to Protect and Control Assets
Trusts are one of the most effective tools for passing down wealth with structure and intention. They allow you to control how and when your children receive assets while keeping the inheritance out of probate court.
If the deceased leaves a spouse and no children, the spouse is entitled to the whole estate. If the deceased leaves a spouse and children, and the children are the spouse's children, the spouse is entitled to the whole estate.
What to do with an inheritance
Ways to Avoid Inheritance Tax Australia
The 7 year rule
No tax is due on any gifts you give if you live for 7 years after giving them - unless the gift is part of a trust. This is known as the 7 year rule.
The most common way to pass your home to your heirs is through a will—a legal document that sets forth your wishes for what should happen to your property and belongings when you die.
This means if a grandparent gives money, investments, or property to a grandchild, the child typically doesn't report or owe anything. However, there are thresholds to know: Annual gift tax exclusion (2025): $19,000 per recipient. Lifetime gift and estate tax exemption (2025): $13.99 million per person.
You can redirect your inheritance to anyone you want. It does not matter if the deceased left a Will or if you inherited under the intestacy rules (i.e. where there is no Will). You may wish to redirect your inheritance to: reduce the amount of inheritance tax or capital gains tax due in the deceased's estate.
The biggest mistake people make with wills is failing to keep them updated after major life changes (marriage, divorce, new children, significant assets), leading to outdated wishes; other huge errors include using vague language, choosing the wrong executor, not understanding that a will doesn't avoid probate, failing to meet legal signing requirements, and not telling anyone where the will is located. In essence, many people either don't make a will or create one that becomes invalid or ineffective over time, causing chaos and family disputes.
If your child is already married, safeguarding their inheritance is still an option. A postnuptial agreement works similarly to a prenuptial agreement but is signed after the wedding. This document can outline which assets, including future inheritances, will remain separate in the event of a divorce.
“Trusts are the most common vehicle to protect and impact assets with some control. Parents can activate a trust while they are still living or have a trust created at the time of their passing," he said. "Trusts can also limit distributions made to current or future spouses.
A direct heir (also known as an heir apparent or lineal heir) is who would be considered the decedent's next of kin, and they are first in line to inherit through intestate succession. If the decedent had been married when they died, their direct heir most likely would be their surviving spouse.
Leaving Money as an Inheritance
Opting to leave an inheritance provides complete control over your assets until the end of your life. This allows you to dictate the terms of their distribution through tools like wills and trusts. This ensures that your financial needs remain covered and simplifies estate management.
Transferring property via inheritance using a life assurance policy. A Section 72 life insurance plan is a policy to cover the inheritance tax bills of the beneficiaries of your estate. Therefore, it allows those beneficiaries to inherit assets without then having to find the money to pay a significant tax liability.
If the sale price is less than the market value of the property, the 'market value substitution rule' will apply, meaning the tax office will deem you to have received the market value of the asset at the time of the transfer.
Centrelink applies gifting limits: you may gift up to $10,000 per financial year, capped at $30,000 over five years. Any amount above these thresholds is treated as a deprived asset and continues to be counted in your assets test for five years, potentially reducing or eliminating your medium-term pension payments.
There are no inheritance or estate taxes in Australia. However, you may have tax obligations for the assets you inherit: capital gains tax may apply if you dispose of an asset inherited from a deceased estate.
What is the seven-year rule in Inheritance Tax? The seven-year rule states there is no Inheritance Tax due on certain gifts (potentially exempt transfers) given to a second party seven or more years before you die.
While state laws differ for inheritance taxes, an inheritance must exceed a certain threshold to be considered taxable. For federal estate taxes as of 2024, if the total estate is under $13.61 million for an individual or $27.22 million for a married couple, there's no need to worry about estate taxes.
Dependent children under 25 will receive your super as regular income payments until they turn 25 (or your account balance runs out). After that, we'll pay them your remaining super as a lump sum.
You'll need to add half of your profit to your income for the year. Because your profit was $100,000, you'll report $50,000 as a taxable capital gain. Your personal tax rate is then applied to the total amount of income you reported to determine how much tax you owe.
IHT may have to be paid on the estate if it's worth more than the tax-free threshold of £325,000. This means that the first £325,000 of your estate is tax-free – the 40% tax only applies to any assets over this threshold.