I had a coffee last week with an accountant in Parramatta who’s been running family trusts for clients since the late 90s. His observation, almost in passing: “Streaming used to be a bit of admin. Now it’s a project.” That’s roughly where the discipline sits in May 2026, and it’s worth unpacking why — because most clients still think of streaming as a checkbox the accountant ticks before 30 June.

A discretionary trust, in plain terms, lets the trustee decide each year who gets what slice of the income. The “streaming” part is more specific. Since the 2010–11 amendments to Division 207 and Subdivision 115-C of the ITAA 1997, trustees have been able to allocate franked dividends and net capital gains to specific beneficiaries, provided the deed permits it and the resolutions are properly drafted before year-end. That sounds clean on paper. In practice it’s where most of the disputes I see actually start.

Why 2026 is messier than 2020

Three things have shifted. First, the ATO’s TR 2022/4 ruling on section 100A — the so-called reimbursement agreement provision — has settled into something resembling an enforcement posture. Trustees who distribute to adult children on lower marginal rates and then have those amounts “lent back” or used for parents’ benefit are now in genuine danger of having the distributions disregarded and the trustee taxed at 47%. The 2024 Federal Court decisions in the Guardian appeal lineage made clear that ordinary family dealings still get protection, but anything that looks like tax-driven reallocation does not. The ATO’s own guidance on section 100A is now the document advisers actually read line by line, rather than skim.

Second, deed quality matters more than it ever has. I’ve reviewed deeds from the early 2000s where the streaming clauses simply don’t contemplate capital gains as a separate class — the deed talks about “income” in the trust law sense and stops there. If the deed doesn’t allow specific entitlement to franked dividends or capital gains, the streaming doesn’t work, full stop, no matter how carefully the resolution is drafted. Variations to bring older deeds up to date have become common engagements. They’re not difficult, but they need to happen before the income year you’re trying to stream in, not after.

Third, the resolutions themselves are under more scrutiny. A trustee resolution dated 30 June but signed in mid-July is the sort of detail that auditors are now picking up on, and the consequences — default beneficiary takes the lot, often a corporate beneficiary at 30%, sometimes a minor at penalty rates — are painful enough that practitioners have started using dated electronic signing platforms to put the question of timing beyond doubt.

What still works cleanly

For all the tightening, streaming hasn’t been abolished. A few patterns are still defensible and common:

• Streaming franked dividends to a beneficiary who can use the imputation credits, typically an adult on a 30%-plus marginal rate or a corporate beneficiary that will then pay a fully franked dividend on. The mechanics here haven’t changed.
• Streaming capital gains to a beneficiary who has carry-forward capital losses. The matching is genuine economic substance and the ATO has never had a problem with it.
• Distributing to a low-income retired parent who is genuinely funding their own retirement from the distribution. The 100A risk is low because there’s no reimbursement happening — they’re spending the money.

What’s gone, or at least gone risky: distributing to adult uni-aged children who then “gift” or “lend” the money back; round-robin arrangements between related trusts that smooth income; and the once-popular pattern of having a corporate beneficiary book up an unpaid present entitlement and then quietly never pay it.

The practical checklist for this year

If you’re a trustee, or you advise one, the questions worth answering before 30 June 2026 are roughly: does the deed actually permit specific entitlement to each class of income I want to stream? Have I confirmed each intended beneficiary’s tax position so I’m not creating unused franking credits or wasted CGT discounts? Is there a credible non-tax reason for each distribution? And has the resolution been signed and dated contemporaneously, with evidence?

I’ve watched more than one family fall out over a trust distribution that looked sensible on the spreadsheet but couldn’t survive a question about why the money never actually moved. The estate planning angle matters too — if the controlling individual dies, the appointor power and the deed’s mechanics for replacing the trustee become the whole game, and that’s a separate conversation worth having before it’s needed. The Treasury Laws Amendment package on trust integrity measures released drafts during 2025 are worth watching as the 2026–27 year approaches; the direction of travel is unmistakably toward more documentation, not less.

The short version is that family trusts still work, streaming still works, and discretion is still real. But the era of treating the year-end resolution as paperwork is over. Treat it as the legal instrument it is, and most of the trouble disappears before it starts.