Many Australians assume that inheriting their spouse’s superannuation pension is a straightforward process.
In reality, it can become surprisingly complicated.
If receiving a death benefit pension causes your Transfer Balance Account to exceed your personal cap, action may be required.
What Happens If You Exceed the Cap?
Unlike your own retirement pension, a death benefit pension generally cannot simply be moved back into the accumulation phase.
Instead, depending on your circumstances, you may need to:
- Receive part of the benefit as a lump sum.
- Partially commute your own retirement pension.
- Restructure your retirement income.
The most appropriate option depends on your tax position, estate planning objectives and overall retirement strategy.
Every Family’s Situation Is Different
The amount of available cap space depends on factors including:
- Your existing retirement pensions.
- Previous use of your Transfer Balance Cap.
- The value of the inherited benefit.
- Whether indexation has increased your personal cap.
This is why personalised advice is so valuable before making decisions about how death benefits should be received.
Speak With Forman Financial Services
Managing inherited superannuation and death benefit pensions requires careful planning. The decisions you make can affect your retirement income, tax position and estate planning for many years.
Contact Forman Financial Services here to arrange a confidential consultation. We can explain your available options, assess how the Transfer Balance Cap applies to your circumstances, and work alongside your accountant and legal advisers to develop a strategy that supports your long-term financial goals.
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.