For beneficiaries focused on estate planning, preserving contribution flexibility after inheriting a reversionary pension may be especially valuable. Reversionary pension estate planning can help beneficiaries maximise future contribution opportunities and improve long-term wealth transfer outcomes.
Why Timing Matters
A large reversionary pension can inflate your Total Super Balance (TSB) before the next financial year, potentially eliminating recontribution strategies designed to:
- Increase tax-free components
- Reduce death benefit tax for adult children
- Preserve future NCC capacity
Example
Bryan’s case on page 3 demonstrates how withdrawing funds before 30 June could preserve eligibility for future NCCs and larger bring-forward opportunities.
Potential Strategies
- Withdraw before 30 June
- Re-contribute strategically
- Avoid accidental bring-forward triggering
- Position for indexed cap increases
Many beneficiaries focus solely on pension payments and Transfer Balance Cap issues. However, Total Super Balance thresholds can also affect future contribution opportunities. Reviewing your position before 30 June may help preserve flexibility and avoid unintended restrictions on future superannuation strategies.
Key Lesson
Sometimes withdrawing super temporarily may preserve greater long-term super advantages. Effective reversionary pension estate planning involves considering both immediate pension needs and future contribution opportunities.
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Inherited a reversionary pension? Contact us here to discuss your contribution and estate planning 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.