Do you really understand your superannuation? I doubt many of us do.
Your superannuation usually isn’t part of your estate, so your Will generally can’t give it away. Unless you’ve made a binding death benefit nomination, the fund decides who receives it. For most people super is the second largest asset they own and the one their Will has least control over.
Australians held a combined $4.4 trillion in super at 31 March 2026, up almost 8 per cent over the year, according to APRA’s quarterly superannuation statistics.
Why is superannuation a trap?
Superannuation is a big trap in estate planning for two reasons:
- people don’t understand it, don’t always take advice and sometimes fall into thinking it’s all very simple; and
- the regulatory environment of super is over-complicated and in some cases confoundingly silly.
Contrary to popular belief, superannuation isn’t usually dealt with as part of your estate on your death. So generally you can’t give it away in your Will.
Who decides where your super goes?
The rules of your super fund determine how it’s dealt with. In most cases the fund pays the death benefit directly to family members, either:
- in accordance with a binding death benefit nomination or BDBN, being a document you make that binds the fund to pay the benefit to certain eligible beneficiaries; or
- where there’s no BDBN, at the discretion of the fund.
When did you last have tea with your fund manager?
That’s the point. Without a binding nomination, a stranger decides who receives the second biggest asset you own, working from whatever the fund knows about your family. Where the family disagrees, the decision can be taken to the Australian Financial Complaints Authority, which adds months to an already difficult time.
Who can receive your super?
Super can only be paid to a dependant or to your legal personal representative, meaning your executor.
Dependants generally include your spouse or de facto partner, your children of any age, someone financially dependent on you and someone in an interdependency relationship with you. A nomination in favour of anybody else fails and the fund falls back on its discretion.
Do binding nominations expire?
Most do. A binding death benefit nomination typically lapses after three years unless your fund offers a non-lapsing nomination and you’ve made one.
People make a nomination, feel organised and never think about it again. It quietly expires and the fund is back to deciding for itself. Check yours when you review your Will. See How often do I need to update my Will?
What about the tax?
This is where families lose real money. A death benefit paid to your spouse or to a child under 18 is generally tax free. A death benefit paid to an independent adult child is generally taxed on part of it.
Most people leave their super to their adult children without ever being told there’s tax on it. Depending on the balance, the amount that goes to the ATO instead of to your family can be substantial and there are structures that reduce it if you plan while you’re alive.
Can you direct your super into your Will?
Yes, by nominating your legal personal representative. The benefit is then paid into your estate and distributed under your Will, which puts it back under your control and lets it pass through a testamentary trust if your Will has one.
This isn’t necessarily the right answer though. Money in your estate can be reached by a family provision claim and money paid directly to a dependant generally can’t. Which route suits you depends on your family and it’s worth working through and getting proper legal advice rather than guessing.
Frequently asked questions
Does my Will cover my superannuation?
Not usually. Super sits outside your estate unless it’s paid to your legal personal representative (executor), so your Will only reaches it if you’ve nominated your legal personal representative or the fund decides to pay your estate.
Can I leave my super to my grandchildren?
Only if they’re dependants of yours, which most grandchildren aren’t. You can direct the benefit to your estate instead and leave it to them under your Will.
How do I check whether I have a binding nomination?
Log into your fund’s member portal or call them. Ask whether the nomination is binding or non-binding, whether it lapses and when it was made.
What happens to super in a self-managed fund?
The same principles apply, but control of the fund itself becomes the issue. Whoever ends up as trustee makes the decisions, so the succession of the trusteeship matters as much as the nomination.
Get your super sorted with your Will
Your Will and your superannuation nomination have to be looked at together. We do that as part of your estate planning.
Book an appointment or call the Wills team on (08) 9220 4433.
This article is general information and not legal advice. It isn’t tax or financial advice either and you should speak to your accountant or financial adviser about your own circumstances.
