Family SMSFs have become more attractive with the expanded six-member limit, opening doors for parents who want to include their children in their Self Managed Super Fund. We have seen this option particularly benefit some of our clients where there has been a family business, such as a farm where parents and children work together in the same business. The shared structure can also help younger members avoid high retail and industry fund fees, given the parents' larger balances help reduce overall costs. It can also help the children to have more control over how their money is invested.

Including adult children in your SMSF can offer unique advantages beyond just cost savings. Young members can develop valuable investment skills while learning about superannuation tax benefits firsthand. Parents often find this hands-on approach helps their children build stronger financial literacy and appreciate long-term wealth building.

That being said, life changes can impact how well a family SMSF functions over time. What works well when children are in their twenties might change as they build their own families and careers. Different investment goals, changing relationships, and varying financial needs can all impact how the fund operates. While many families successfully manage these transitions, the decision requires careful thought about future scenarios and family dynamics.

3 key considerations for adding your children to your SMSF

Adding children to your SMSF affects your financial situation in several ways. Before making decisions about your fund's future, we recommend you seek professional advice from a trusted financial advisor and accountant about the following three key factors and how they might play out in your family dynamics and situation - shared control, financial openness, and changing circumstances.

Sharing control and decisions

Your SMSF operates on equal partnership principles, with each member serving as a trustee or director of a corporate trustee with voting rights. While managing money with your spouse might feel natural, sharing control with your children will inevitably bring new dynamics. Time management also plays a role - retired parents often have more availability for fund management than busy adult children with young families, however all members need to be engaged in managing the SMSF.

Family financial transparency

The transparency that comes with sharing an SMSF extends beyond parent-child relationships to include siblings and their partners. Professional advice can help structure arrangements where children participate in the family SMSF while maintaining other super accounts. This approach can help parents manage their wealth while preserving privacy between family members.

Planning for future transitions

Family SMSFs can serve as excellent learning tools, showing children that fund management is achievable. However, changing circumstances often affect how well these arrangements work long-term. Consider potential challenges when children marry, build their own families, or want to start separate SMSFs with spouses. Early planning and professional advice can help manage issues such as Capital Gains Tax (CGT), asset sales, and insurance transfers that become more complex over time. Setting clear expectations about the arrangement's temporary nature can help prevent future complications.