Children as SMSF dependents very complex

The definition of children as dependants under superannuation law is not straightforward when dealing with blended families.

The definition of children as dependants under superannuation law is not straightforward when dealing with blended families.

A leading superannuation lawyer has highlighted the broad range of circumstances covered in regards to the definition of children as dependants when formulating estate planning strategies.

“Children are a fascinating thing [when it comes to death benefits]. So your children are your children, that’s usually quite clear, but children of your spouse are [also] your children,” Cooper Grace Ward partner Scott Hay-Bartlem told attendees at the ASF Audits Technical Summit 2026 held in Adelaide last week.

“Now if you actually start playing out children of spouses, if you’re separated from someone but not divorced, they’re your spouse. If they’ve then got a new partner they are their spouse and so your step-stepchildren can actually be your children,” he explained.

“So it starts spinning out this whole children of spouses’ spouses [scenario and] one of my [recommendations] to people is once you’ve separated from someone divorce them because the spin on effect can be quite frightening,” he said.

Hay-Bartlem pointed out situations involving stepchildren need to be approached carefully due to the changing nature of their status for superannuation law purposes.

To this end he recognised if an individual has a stepchild as the result of a new spousal relationship this association ends upon the death of the biological parent of the child.

Given this treatment he warned the inclusion of stepchildren as dependants for estate planning purposes are very complex and require a high level of attention from practitioners.

For example, he said, the action of a stepfather or mother to include a stepchild as a dependant in their SMSF estate plan will no longer be valid if the biological parent passes away first.

However, he acknowledged recent decisions handed down by the Super Complaints Tribunal and the Australian Financial Complaints Authority has made this situation more intricate because the rulings stipulated stepchildren remain children even after the biological parent has died.

By: Darin Tyson-Chan | 23 September 2026 | smsfadviser.com