While it may seem logical to nominate a child as a reversionary beneficiary, this strategy can create serious future compliance limitations.
The Problem:
Children can only continue receiving certain death benefit pensions while they remain eligible dependants under SIS rules.
Potential Issue:
Once eligibility changes:
- Pension continuation may fail
- Forced structural changes may occur
- Estate planning intentions may be disrupted
Better Alternative:
A binding death nomination may provide trustee flexibility to:
- Pay lump sums
- Adapt to SIS requirements
- Preserve broader planning outcomes
Key Lesson:
Estate certainty for children often requires flexibility, not automation.
Reviewing Your Superannuation Estate Planning Strategy?
When children are involved, the choice between a reversionary pension and a binding death benefit nomination can have significant long-term implications for flexibility, compliance and estate outcomes.
Small structuring decisions today may help avoid unintended consequences and preserve more options for beneficiaries in the future.
Contact us here to discuss your estate planning and superannuation options.
Disclaimer and Warning
The information above is of a general nature only. It should not be used as a source to make financial decisions. It’s also important to note that the legislation and figures related to this topic tend to change regularly and therefore the information above may not reflect the current status. We recommend that if you are looking for advice on this matter, you should contact us.