Consider this before passing down your superannuation to your adult children

One of the most overlooked estate planning strategies in Australia involves your superannuation.

Many people don’t realise that while super can be passed to a spouse tax-free, adult children who are not financially dependent may pay tax on the taxable component of inherited super.

For some families, a re-contribution strategy later in life can help reduce or even eliminate this taxable component.

In simple terms, this involves withdrawing money from super and re-contributing it as a non-concessional contribution, potentially converting taxable benefits into tax-free benefits for your beneficiaries.

While it may not provide an immediate benefit to you, it could save your children tens of thousands of dollars in tax down the track.

This is a complex strategy with eligibility rules and contribution caps, so it’s important to seek advice before making any decisions.

General advice only.

Amy Lehmann is an Authorised Representative (No. 1292710) of Consortium Private Wealth Pty Ltd (AFS Licence 495401).

#estateplanning #superannuation #wealthtransfer #financialplanning #taxplanning