Superannuation is becoming an increasingly significant asset. For many Australians, their super is one of their largest cash assets. Part of the administration of an estate may require superannuation to be dealt with.

How do I give superannuation away when I die?

Your Will is a legal document that deals with and distributes assets that you own. Superannuation does not normally form part of your estate and you can’t include it in your Will. It usually goes directly to the person that you nominate to receive the benefit from your superannuation.

Superannuation can not be left to someone in your will. If you don’t understand how you can distribute this money to your beneficiaries and erroneously include it in your Will it can cause problems.

Why can’t I leave Superannuation in my Will?

Unfortunately, when making a Will, the Will-maker can mistakenly believe that super is owned by them and will be distributed along with the rest of their estate. However, your superannuation isn’t considered as one of your assets and cannot be included in your 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 owned and managed by the trustee of your Superannuation Fund person who holds it on Trust on your behalf. 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; there is legislation in place to protect your super.

How can I bequeath my superannuation?

Superannuation does not automatically form part of your Estate. You should ensure that you contact your Super Fund with information about your beneficiary or Estate.

What is a death benefit nomination?

A death benefit nomination is a non-binding nomination made by you. In it 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, binding death benefit nomination lapse after three years, so you need to update it before it expires. However, some funds now 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 with your Binding Nomination and by inserting a Superannuation Will 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.

There are only certain types of people who you can nominate under a binding death benefit nomination. These include a spouse, a de facto, children (in some circumstances including 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.

Mid Mountains Legal are experienced in working with Wills and Estates and can ensure your peace of mind with comprehensive legal advice and guidance.

Contact Mid Mountains Legal on 02 47593742 or 0451118644 for a free phone consultation about your Will and distributing your Superannuation.