What about my super?

You may not be aware that your superannuation benefits are not normally part of your estate when you die. This means that as a general rule your super won’t be disposed of in accordance with your Will.

Usually, the trustee of your super fund will pay your entitlements to one or more of your dependants or to your estate. Dependant means your spouse, children of any age or person who is financially dependant on you. Generally the trustee has some discretion as to whom payments are made.

Many people prefer to control the payment of their super on death. Most super funds allow you to make a Death Benefit Nomination or Reversionary Pension, by which you direct the trustee to pay your super to certain beneficiaries or to your estate.

There are two types of Death Benefit Nominations:

  • Binds the trustee of your super fund to pay your benefit to the beneficiaries you have nominated in the proportions you have specified.
  • Expires after 3 years.
  • Some super funds allow you to create a Death Benefit Agreement which operates in the same way as binding nomination but does not expire.
  •  The trustee has discretion to determine which of your dependants will receive your benefit and in what proportion.
    Your wishes will be taken into account.

Death Benefit Nominations can only be made in favour of:

  • your spouse, current or de facto;
  • your children, including step-children;
  • the executor of your Will or administrator of your estate; or
  • any other person financially dependant on you or with whom you have an interdependency relationship.

You must seek advice from a qualified and experienced financial advisor about these matters are there may be taxation advantages and broader financial considerations in choosing a binding nomination or a reversionary pension.

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