When most people think about estate planning, they think about wills, superannuation, and family trusts. But there’s a lesser-known tool that’s rapidly gaining traction—especially for families looking to pass on wealth smoothly and tax-effectively:
Investment Bonds.
Investment bonds assist clients to build wealth outside super, protect assets, and provide financial support to the next generation—without the potential delays, costs, or risks of probate or disputes.
If you’re looking for a tax-smart, flexible way to grow wealth and leave a legacy, this is worth your attention.
What Are Investment Bonds?
Investment bonds are a long-term investment structure with special tax treatment. They’re technically a life insurance product but function more like a “tax-paid investment vehicle.”
Here’s how they work:
- You invest money into the bond
- The bond is taxed internally at a maximum rate of 30%
- After 10 years, any withdrawals are tax-free to the investor
- You can nominate beneficiaries, and proceeds are paid directly – bypassing your estate
Why Investment Bonds Are Gaining Popularity
- Tax-Effective Wealth Building
No need to declare investment earnings on your personal tax return if rules are followed. Perfect for high-income earners wanting to build wealth outside super.
- Bypass Probate
Money goes directly to nominated beneficiaries, avoiding delays and potential challenges in your estate.
- Intergenerational Control
You can structure bonds to pay out at certain ages or milestones (e.g., when a child turns 25 or finishes study).
- Benefits for Parents and Grandparents
Want to give your kids/ grandkids a financial head start without handing over cash now? Bonds offer control, structure, and peace of mind.
Who Should Consider Investment Bonds?
- Retirees who are over the super transfer balance cap
- High-income earners looking for tax-effective investments
- Grandparents or parents wanting to gift money in a structured way
- Blended families, where traditional estate planning may lead to conflict
- Executors and trustees wanting to avoid prolonged probate
A Real-World Example
A widowed retiree with $200,000 earmarked for her grandchildren—used an investment bond to:
- Invest the money tax-effectively
- Nominate each grandchild as a beneficiary
- Set age milestones for payout (e.g., 25 years old)
- Avoid future legal challenges or changes to her will
The family is now protected, the money is growing, and she’s enjoying peace of mind knowing her legacy is secured.
Why Work With an Independent Planner?
As self-licensed, independent financial planners, we don’t promote a single product or provider—we tailor the right strategy for your needs.
We also ensure the bond complements your full financial picture: super, pension, estate plan, tax, and Centrelink.
And unlike banks or product providers, we don’t work on commissions or hidden fees. Just transparent, personalised advice.
General Advice Disclaimer
The information contained on this website has been provided as general advice only. The contents have been prepared without taking account of your objectives, financial situation or needs. You should, before you make any decision regarding any information, strategies or products mentioned on this website, consult your own financial advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs.