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Estate planning - The tricky timing of Super withdrawals

Imagine your super savings as a giant nest egg and think of the estate planning consequences.

For many Australians, it's their biggest financial asset besides their house.

The beauty? While you're alive and kicking, accessing that nest egg usually means tax-free cash – a win-win!

But what happens when you pass away and leave it to your loved ones?

Family estate plan
Estate Plan

Here's where things get a little more complex.

The money goes to your loved ones as a death benefit, but there's a potential tax bite.

Depending on how your adult children receive it, they might face a tax bill of up to 17%.

Not exactly the warm and fuzzy feeling you want them to have when inheriting your hard-earned savings.

One strategy that might pop into your head is to simply withdraw everything before you go, stick it in your bank account, or hand it over directly to your loved ones.

It seems like a straightforward solution, right?

You're in control of the timing, and voila—no more super, just tax-free cash for your family.

Hold on a second, though. This simple estate and succession planning solution can get messy.

Let's say you're feeling a bit under the weather, or maybe your health isn't what it used to be.

Worried about your loved ones' financial security, you tell your family to get the ball rolling on taking out all your super.

But what if, tragically, you pass away before you finalise the paperwork?

Now, you've created a real headache.

The Australian Taxation Office (ATO) frowns upon last-minute super withdrawals, especially if they seem like a disguised death benefit (which, you guessed it, attracts tax).

So, the takeaway? Taking out your super early to save taxes for your family can be a smart move, but it's crucial to play it safe.

Three key points to remember with your estate planning:

Give yourself ample time: Don't wait until your health takes a turn for the worse to initiate the super withdrawal process.

Start planning well in advance to avoid any last-minute rush.

Seek professional guidance: A qualified financial advisor, particularly a fiduciary investment advisor who prioritizes your best interests, can help you navigate the complexities of super and estate planning.

An advisor can work with a specialist estate planning attorney to give you the best possible outcomes.

Explore other options: Alternative ways to structure your estate that minimise the tax burden on your loved ones might exist. A fiduciary financial advisor can help you explore these options and find the best fit for your situation, including how to find a suitable estate planning attorney.

Remember, this blog is just a starting point.

If you are considering early super withdrawal or have any questions about estate planning it's always best to consult with a professional.

They can help you create a personalised strategy that maximizes benefits for your loved ones while keeping the taxman at bay.

Want to take a deeper dive into estate planning? 


We've got you covered! Email us at with the subject line "EP Checklist" to receive a copy of our comprehensive Estate Planning Checklist.    


Here are some other useful resources to learn more about estate and succession planning:





Alternatively, if you'd prefer a personal touch, book a free 15-minute consultation via our website button to discuss your specific situation and explore how to optimise your estate plan. 


Don't let your super savings become a tax burden for your loved ones.


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The information provided on this website/in this document (including any [financial products] mentioned) is general advice only and does not take into account your individual objectives, financial situation or needs.

Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product (if any) having regard to your objectives, financial situation and needs.



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