It's now more than three months since the May budget was handed down, and the fallout continues unabated.

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This legislation reminds me of an architect under pressure to get a building up in a hurry: the design is poor, construction rushed, and the cracks appear almost immediately.

Treasury has been racing around with the toolbox, patching one crack after another. This isn't sensible tax reform; it's emergency maintenance on legislation that should never have left the drawing board.

The first example is testamentary trusts. These are trusts created under your will, so an inheritance can be managed for a beneficiary rather than simply handed to them.

As estate-planning lawyer Rachael Rofe puts it: "A testamentary trust is not a tax dodge. It is a set of protective walls around an inheritance."

Then Treasury came along with its new 30 per cent minimum tax on discretionary trusts. The budget exempted existing testamentary trusts, but a testamentary trust doesn't normally exist until somebody dies. You may have a perfectly valid will containing testamentary trusts, but if you were alive on Budget night, those trusts didn't yet exist and could therefore be caught.

The uproar was immediate. Estate-planning specialists pointed out that these weren't elaborate tax dodges but long-established structures designed primarily to protect beneficiaries. Treasury suggested fixed trusts instead, missing the flexibility that makes discretionary testamentary trusts so useful.

So out came the toolbox. Treasury announced an exemption from the proposed 30 per cent minimum tax on discretionary trust income for testamentary trusts. One crack patched, but plenty more remain.

And it's........

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