Aged Care Reforms: Impact on Succession and Estate Planning

The Aged Care Act 2024 received Royal Assent on 2 December 2024, replacing the long-standing Aged Care Act 1997 (Cth). The new Act commenced on 1 November 2025. The change is more than a technical update. It marks a shift to a rights-based, ethical model.

For advisers and their clients and their families, the new Act raises several important considerations and potentially new obligations:

Wills and Testamentary Provisions: Given the uncertain return (or partial retention) of RADs (Refundable Accommodation Deposit), lawyers may need to review and update testamentary clauses — especially where bequests rely on the full value of the RAD returning to the estate.

Asset Advice: Clients with significant assets may need guidance on how aged-care obligations (RADs, DAPs, means-tested contributions) interact with their broader estate plan, including potential impacts on trusts, or gifting strategies.

Supported Decision-Making: The new Act promotes supported decision-making and requires providers to engage “older people and their supporters” in care and accommodation agreements. For clients who may lose capacity, they should consider formalising powers of attorney, care directives or appointment of “supporters” (or equivalent) in advance.

Pre-Entry Advice: Because the new Act changes the rules around “accommodation agreements” (to be renamed “service agreements”), providers will have to offer full disclosure (including about RAD/DAP, retention policies, refund and contribution arrangements) before a resident enters care. Clients should take the opportunity to get independent legal advice before signing.

Early Planning: Given the the possibility that aged-care costs will erode estate assets (especially RADs), early estate-planning is critical.

Ethical and Capacity Considerations: With supported decision-making in the new Act, ethical issues around capacity, autonomy, and consent may arise more often, especially for vulnerable clients.