Why 2026 marks a turning point in estate planning

Investment bonds are stepping into the spotlight as structural changes reshape the estate planning landscape in 2026. With the Division 296 superannuation tax soon to be legislated and scrutiny around trust structures intensifying, advisers and investors are rethinking how they preserve and transfer wealth.

The emphasis is shifting from traditional structures to more flexible, transparent options, and investment bonds are emerging as a key tool in navigating this new era of intergenerational planning.

This shift is prompting renewed conversations, not just about structures, but about control, legacy and the long-term stability of wealth strategies.

What’s also becoming clear is that estate planning can no longer sit as a footnote in the conversation, with them starting earlier in the financial journey, largely driven not by age but by structural risk.

The new super tax, applying an additional 15 per cent on earnings for balances above $3 million, may initially affect a relatively small cohort. But its fixed threshold is already reshaping behaviour.

Advisers have been fielding questions throughout 2025, and not just from retirees, but from professionals in their 40s and 50s who are preparing for their future and that of their families.

For many, the concern isn’t the tax itself, but the precedent it sets.

At the same time, discretionary trusts are being examined more closely and not just by regulators, but by families themselves.

Trusts do remain effective in situations, but they rely on discretion, ongoing administration and, increasingly, careful legal oversight. In a more litigious and complex environment, that has prompted some investors to look for structures that offer clearer lines of ownership and intent.

Taken together, these developments are changing the tone of estate planning discussions. The emphasis is shifting away from maximising tax-efficiency at a single point in time, and toward durability. Will this structure still work when the rules change? Will it still reflect my intentions in 10 or 20 years? Will it be understood by the next generation?

One outcome of this shift has been the renewed interest in investment bonds.

Long regarded as a specialist or secondary solution, investment bonds are being reassessed for their structural attributes rather than their novelty. They operate in a tax-paid environment, with earnings taxed at a maximum of 30 per cent, and after ten years, withdrawals are generally tax-free if contribution rules are met.

More importantly in the current climate, investment bonds allow investors to nominate beneficiaries directly, enabling assets to pass outside the estate and avoid probate.

That certainty is increasingly valuable. Unlike superannuation, bonds are not subject to preservation rules or contribution caps. Unlike trusts, they don’t rely on trustee discretion or annual distribution decisions. They sit in a defined legislative framework that has remained relatively stable over time.

What’s changed is how they’re being used.

Rather than being viewed as a solution for a narrow set of circumstances, the bonds are now being incorporated into broader wealth strategies. They’re being used to fund education, support housing assistance for adult children, manage intergenerational transfers and structure long-term giving. In each case, the appeal is the same: clarity of outcome.

This is not about replacing existing structures. Superannuation remains central to retirement planning. Trusts continue to serve an important role for many families. But the system is becoming more layered, and investors are increasingly conscious of concentration risk, not just in assets, but in structures.

From a policy perspective, this evolution is understandable. Governments are grappling with budget pressures and demographic change. Investors, in turn, are responding by seeking structures that are less exposed to shifting goalposts.

For advisers, 2026 is shaping up as a year of deeper, more strategic conversations. Estate planning is no longer a compliance exercise or a document to be reviewed every decade. It’s becoming an ongoing process that reflects how families live, work and build wealth today.

The common thread running through these discussions is control. Control over timing; control over beneficiaries; control over outcomes.

As the financial system continues to evolve, tools that provide that control without unnecessary complexity are being re-evaluated. Investment bonds are part of that reassessment.

They may not be new, but in a year defined by structural change, their relevance is.

Craig Brooke