Leading estate lawyer warns Aussies to act fast to avoid government's 'Square Root Tax'
Australians are being urged to urgently review their Wills and estate plans following the Federal Government’s proposed capital gains tax changes, with leading estate lawyer Jennifer Williamson warning many families could unknowingly hand a significant portion of their wealth to the Tax Office.
Williamson, Principal of Williamson and Associates, said many Australians have spent decades building wealth, paying tax throughout their working lives and carefully planning how assets will be passed on to future generations.
Now, she warns, those plans could be at risk.
“Many Australians believe their Will is designed to benefit their family,” Williamson said.
“My concern is that under the proposed changes, some people may discover their estate is benefiting the Tax Office far more than they ever intended.”
The rise of what Jennifer calls the ‘Square Root Tax’
Williamson has coined a new term for the proposed changes.
“I call it the Square Root Tax,” she said.
“Because no matter which way you look at it, it feels like the Government wants to tax every square inch of your life and not once, but several times. People will be paying tax over and over again on income they have already paid tax on.
“You earn money and pay income tax, you invest and pay tax, you save and pay tax, you buy assets and pay tax. Then when those assets are eventually sold or transferred, there may be another tax event.
“In my view, many Australians are increasingly worried that wealth they have spent a lifetime building is being taxed over and over again.”
Your Will may no longer do what you think
Williamson said the greatest danger is that many existing estate plans were created under a completely different tax environment.
“People wrote their Wills based on one set of assumptions,” she said.
“If those assumptions change, the outcomes can change dramatically. Beneficiaries could inherit assets carrying significant tax consequences.
“What looks like a generous inheritance on paper may ultimately deliver far less value than intended. In some cases, families could be forced to sell assets simply to meet tax obligations.”
Property owners could be particularly exposed
Williamson said property-owning Australians should be paying close attention.
“For many families, property represents the largest component of their estate,” she said.
“Parents often assume those assets will seamlessly pass to children and grandchildren. The reality may be much more complicated. Changing tax settings can alter how assets should be structured, distributed and managed.
“Estate planning is no longer simply about deciding who gets what. It is increasingly about understanding the tax consequences attached to every decision.”
The hidden threat to family harmony
Williamson said poorly structured estates can create more than financial problems.
“They can create disputes. When beneficiaries discover an inheritance carries unexpected tax liabilities, resentment often follows. What was intended as a gift can quickly become a source of conflict,” she said.
She said many estate disputes begin because beneficiaries receive very different outcomes than the deceased intended.
Why Australians need advice now
Williamson said waiting until the legislation is finalised may be a mistake.
“People should be understanding their options now. You don’t want to be scrambling after the fact when opportunities to restructure may be more limited,” she said.
She said many Australians are unaware how frequently estate plans should be reviewed.
“A Will is not a set-and-forget document. Major tax changes, family changes, business changes and asset changes should all trigger a review,” Williamson added.
Protect your family, not the Tax Office
Williamson said the purpose of estate planning is simple.
“It is about ensuring your wealth ends up where you want it to go,” she said.
“Most Australians want their assets supporting their children, grandchildren and loved ones, not disappearing unnecessarily through poor planning.”
Her message is direct.
“If you have a Will, have it reviewed. If you own investment assets, have them reviewed. If your estate plan has not been looked at in years, now is the time,” Williamson urged.
“Don’t spend a lifetime building wealth only to discover your estate has become an unintended gift to the Tax Office.”
About Jennifer Williamson
Jennifer Williamson is the Principal and founder of Williamson and Associates, a Brisbane-based legal practice specialising in Wills, estate planning and Enduring Powers of Attorney. With more than 35 years of experience, she is a member of the Queensland Law Society and a commissioned Notary Public. Based in Rocklea, Brisbane, she works with individuals and families across Queensland to deliver practical, cost-effective and personalised legal solutions.
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