Superannuation is becoming an increasingly significant asset. For many Australians, their super is one of their largest cash assets.

How do I give superannuation away when I die?

Your Will deals with and distributes your assets. However, your superannuation isn’t considered as one of your assets and can’t be included in your Will. It usually goes to the person that you nominate to receive the benefit from your superannuation.

If you erroneously include your superannuation in your Will it can cause problems.

Why can’t I leave superannuation in my Will?

A Will-maker can mistakenly believe that super is owned by them and will be distributed along with the rest of their estate.

Due to the way in which superannuation schemes are set up, the money in your superannuation account is not owned by you personally: it is held on trust on your behalf by the trustee of your superannuation fund. Only the trustee can distribute the money in your account. They can distribute your superannuation to your beneficiaries, but not as part of your Will.

The trustee cannot simply do as they like with this money: legislation protects your super.

How can I bequeath my superannuation?

You should contact your super fund to advise them who you want to be the beneficiary of your super.

What is a death benefit nomination?

A death benefit nomination is a non-binding nomination in which you express your wishes to the trustee of your superannuation fund about who you would like to receive your death benefit on your death.

What is a binding death benefit nomination?

A binding death benefit nomination is a binding nomination made by you directing the trustee of your superannuation fund who to pay your death benefit to on your death. Traditionally, a binding death benefit nomination lapses after three years, so you need to update it before it expires. However, an increasing number of funds allow for non-lapsing binding nominations which need not be renewed.

A binding death benefit nomination specifies that the trustee must distribute superannuation in your account to the beneficiaries you nominate.

How do I ensure that my super is distributed according to my wishes?

You can ensure that your superannuation is distributed according to your wishes by notifying your superannuation fund of your binding nomination and including a superannuation clause in your Will.

In your Will you can stipulate who is to receive the benefits of your superannuation account. You nominate through your superannuation fund your legal representative as the beneficiary of your superannuation, who can then distribute it according to your Will.

For this strategy to work, your Will must include a superannuation clause and you must keep the binding nomination and the beneficiaries in your Will up to date.

A simpler option is to make a binding death benefit nomination with your superannuation fund and the money will be distributed to the named beneficiaries on your death.

You can only nominate certain categories of people in a binding death benefit nomination. These include a spouse, a de facto, children (and in some circumstances step children), dependents, inter-dependents, and your estate.

How do I make a binding nomination with my super fund?

You nominate someone using a death benefit nomination form or a binding death benefit nomination form.

What happens if I don’t make a binding nomination?

If you don’t make a binding nomination or it has expired at the time of your death, the trustee of the super fund has the ultimate discretion about who will receive that benefit. They can either pay the money directly to your estate or decide which of your beneficiaries should receive it.

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