For many Australians, their superannuation savings may be one of their most substantial (if not often thought about) assets. Unlike other assets though, your superannuation benefits do not automatically form part of your estate when you pass away, and so cannot be disposed of through your Will.
In order to properly ensure that your super goes where you want it to, you need to make a binding death nomination with your superannuation fund. This is normally quite straightforward to do, and can be done online through your super account.
To make a binding death benefit nomination, follow these steps:
Contact your super fund to obtain the necessary forms for making a binding death benefit nomination.
Complete the form, naming your Legal Personal Representative (executor) as the beneficiary.
Submit the form to your super fund and confirm its acceptance.
Periodically review and update your nomination to ensure it remains valid and reflects your current wishes.
The death benefit includes the total amount of money in your super account at the time of death plus any life insurance cover through the super fund.
If you do not make a binding death nomination, the trustee of the superannuation fund will usually decide whether the benefits are paid directly to one or more of your dependants, or to your estate.
If you nominate your Legal Personal Representative (executor) as the beneficiary, the superannuation benefits will be directed to your estate and distributed according to your Will. This ensures that your wishes are followed and provides clarity for your executor.
For super death benefits, dependants will include:
your spouse (including de-facto partners)
your children
people with whom you had an interdependency relationship
people who depend on you financially
If you are unsure of how your superannuation or death benefits will be dealt with or you require further information about binding nominations, we recommend that you seek independent advice from your superannuation provider and/or a suitably qualified legal professional, and, if necessary, consult with a financial advisor.
Regularly review your superannuation nominations to ensure they align with your estate planning goals. Keep them up to date, especially after major life events such as marriage, divorce, or the birth of a child. Additionally, consider listing your superannuation in your Will’s asset inventory to help your executor manage this asset effectively.