16/10/2026
Imagine leaving your kids $500,000 in super... only for $85,000 to go in tax!
It's probably not something you've given much thought to. After all, most of us assume that when we pass away, our super will simply go to the people we've nominated.
But it's not quite that straightforward.
And depending on who inherits your super, there could be a pretty hefty tax bill.
Here's an example that might surprise you.
Let's say you have $500,000 in super when you pass away, and it goes directly to your adult children.
If they're financially independent and your entire super balance is made up of the taxable (taxed) component, the tax could look like this:
💰 Super balance: $500,000
💸 Tax (including Medicare levy): $85,000
That leaves your children with $415,000.
That's a significant amount of money potentially lost to tax.
But it doesn't necessarily have to be that way.
There are strategies that a financial planner can help you explore well before this becomes an issue.
One of these is called a recontribution strategy.
Put simply, if you're eligible, you may be able to withdraw some of your super and put it back in as an after-tax contribution.
Why would you do that?
Because it can change the tax components of your super, potentially reducing the tax your adult children would pay when they inherit it.
Depending on your circumstances, the savings could be substantial.
In some cases, the tax could potentially be eliminated altogether.
Of course, there are rules around when you can access your super, how much you can recontribute and whether the strategy is right for you.
And that's where good financial advice can make a real difference.
It's also worth checking who you've nominated to receive your super, whether your nomination is still valid and whether your wishes are properly documented.
At Feel Good Financial Planning, we help people work through these decisions so they can make informed choices about their super and what happens to it down the track.
When was the last time you checked your super beneficiaries?
If you're not sure, or you'd like to understand whether there are opportunities to reduce the tax your family might pay, we'd be happy to have a chat.
👉 Book a complimentary appointment with one of our Senior Financial Planners - https://calendly.com/d/crt9-wcy-65d
The example assumes a $500,000 lump-sum death benefit consisting entirely of the taxable (taxed) component, paid directly to adult children who are not tax dependents, with 15% tax plus 2% Medicare levy. Recontribution strategies depend on eligibility, contribution caps and individual circumstances.
This information is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice.
