Australia is in the middle of its largest intergenerational wealth transfer. Baby boomers hold close to $5 trillion in assets, and estimates suggest between $3.5 trillion and $5.4 trillion will pass to younger generations over the next two decades.

Most of it sits in two places: superannuation and residential property.

Both require deliberate planning to transfer well. Neither moves automatically. And many families — including financially capable ones — have not had the conversation about how it should happen, let alone put the right structures in place to make it so.

This is not a morbid topic. It is a practical one. Getting it right protects your family, reduces conflict, and ensures the wealth you have spent a lifetime building goes where you intend.

The Super Problem Most People Don't Know About

Superannuation is one of the most tax-effective ways to accumulate wealth — but it comes with a quirk that surprises many clients. Super does not automatically form part of your estate.

When you die, your superannuation balance is paid at the discretion of the fund trustee — unless you have put a valid nomination in place. Without one, the trustee decides who receives your super, guided by law and the fund's trust deed. The outcome may not match your wishes, your will, or what your family expects.

There are several ways to direct your super on death, and each works differently.

Binding death benefit nominations are the strongest tool. They legally require the fund to pay your super to the people you nominate, provided those people are eligible beneficiaries — broadly, your spouse, children, financial dependants, or your estate. Most binding nominations through retail and industry funds are lapsing, meaning they expire after three years. If you set one up in 2022 and haven't renewed it, it may no longer be valid.

Reversionary nominations apply once you are drawing a pension from your super. Rather than paying a lump sum on death, the pension continues to a nominated dependant — most often a spouse. This can provide a steady income stream for a surviving partner rather than a one-off payment to navigate.

Non-binding nominations guide the trustee but do not bind them. They are better than nothing, but they do not guarantee the outcome. For SMSF members, non-lapsing nominations are generally available and offer more flexibility — but the rules and documentation requirements are specific and worth reviewing carefully.

The starting point: check your nomination right now. If it is more than two or three years old, or if your circumstances have changed since you made it — a marriage, divorce, new child or grandchild, or the death of a nominated beneficiary — it probably needs updating.

Your Will and Your Super Are Separate Documents

This is one of the most common misunderstandings in estate planning. Many people assume that because their will says “everything goes to my children equally,” their super will follow the same instruction.

It will not, unless you have specifically directed your super to your estate and your will addresses it accordingly.

A well-structured estate plan coordinates your will and your super nominations so that they work together rather than pulling in different directions. It also considers what happens to assets held in a family trust, a company structure, or jointly — each of which has its own rules.

Wills and estate plans should be reviewed with a solicitor, not set and forgotten. Major life changes — remarriage, the birth of grandchildren, the death of a beneficiary — all warrant a review.

Superannuation and Tax: What Beneficiaries Need to Know

The tax treatment of superannuation death benefits depends on who receives them and the composition of the balance.

Benefits paid to a spouse, a child under 18, or a financial dependant are generally received tax-free. Benefits paid to adult children who are not financially dependant — the most common scenario for older clients — may include a taxable component that is subject to tax in their hands.

This is not a reason to avoid superannuation. It is a reason to understand the structure of your balance and consider, with your adviser, whether directing super to your estate (rather than directly to beneficiaries) might produce a better outcome for your family.

Testamentary Trusts: A Tool Worth Understanding

A testamentary trust is a trust created by your will that comes into existence only when you die. Rather than leaving assets directly to beneficiaries, your estate is transferred into a trust managed by a trustee for the benefit of the people you nominate.

There are several reasons families choose this structure.

For families with grandchildren, the income tax treatment can be attractive. Income distributed to children from a testamentary trust is taxed at adult marginal rates, meaning each child beneficiary has access to the standard tax-free threshold — currently $18,200. For a grandparent leaving assets to multiple grandchildren, this can meaningfully reduce the tax paid on income earned by the estate.

Testamentary trusts also offer asset protection benefits. If a beneficiary later faces a creditor, a divorce, or financial difficulty, assets held in a properly structured testamentary trust are typically better protected than assets received outright.

It is worth noting that the 2026 Federal Budget proposed changes to the tax treatment of discretionary trusts. These proposals are complex, the legislation is still working through Parliament, and the interaction with testamentary trusts — which arise from deceased estates rather than during a person's lifetime — requires careful legal advice. This is an area where a conversation with both a financial adviser and a solicitor is essential before making any decisions.

The Conversation That Makes Everything Else Work

The practical structures above — nominations, wills, testamentary trusts — are tools. They work best when the people involved understand what has been planned and why.

One of the most common sources of family conflict after a death is surprise. Children who expected equal treatment and received unequal outcomes. A spouse who did not know where the super nomination was directed. Family members uncertain about who makes decisions if incapacity precedes death.

None of this requires sharing every detail of your finances with your children. But a broad conversation — “here is what we have put in place, here is where the important documents are, and here is who to call” — can prevent months of legal and emotional difficulty at an already difficult time.

If you have an enduring power of attorney, make sure the person you have nominated knows about it and knows where the document is kept. If you have a testamentary trust in your will, consider whether the proposed trustee understands what it involves.

A Practical Starting Point

If you have not reviewed your estate planning recently, a useful sequence might be:

Check whether your super death benefit nomination is current and valid. If you are in pension phase, check whether a reversionary nomination is in place. Review your will with a solicitor, particularly if circumstances have changed in the past five years. Consider whether a testamentary trust structure is appropriate for your family and ask your adviser and solicitor to explain the options. Have at least a basic conversation with your family about what you have planned.

None of this needs to happen in one sitting. But the earlier it is addressed, the more options you have.

The Bottom Line

The wealth transfer conversation is not about death. It is about making sure a lifetime of careful financial decisions carries through the way you intend — to the people you care about, in a way that protects them, and without the friction that poor planning almost always creates.

Superannuation, property and estate structures all have their own rules. They need to work together. And they need to be reviewed as your circumstances change — not set once and forgotten.

Speak with an Adviser

If you would like to review your estate planning arrangements, or have a conversation about how your assets are structured to pass to your family, we are happy to help. Estate planning involves both financial advice and legal advice — we work with both and can help coordinate the right conversation.

Next Steps

To find out more about how a financial adviser can help, speak to us to get you moving in the right direction.

Important information and disclaimer

The information provided in this document is general information only and does not constitute personal advice. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser. From time to time we may send you informative updates and details of the range of services we can provide.

FinPeak Advisers ABN 20 412 206 738 is a Corporate Authorised Representative No. 1249766 of Spark Advisers Australia Pty Ltd ABN 34 122 486 935 AFSL No. 458254 (a subsidiary of Spark FG ABN 15 621 553 786)