Your superannuation does not necessarily form part of your estate or pass according to your Will when you die. What happens to your superannuation death benefit will depend on the rules of your superannuation fund and any valid death benefit nomination you have made.
A death benefit nomination allows you to nominate who you would like to receive your superannuation death benefit. Depending on the type of nomination and whether it is valid, the nomination may be binding on the trustee of your superannuation fund or may guide the trustee when deciding how your death benefit is paid.
Considering your superannuation alongside your Will is therefore an important part of estate planning. Your Will and your superannuation arrangements should work together so that you understand how your assets are intended to pass after your death.
Questions about your Superannuation
Does my superannuation form part of my estate?
Not necessarily. Superannuation is generally dealt with separately from the assets that pass under your Will.
Depending on your superannuation arrangements and any valid death benefit nomination you have made, your superannuation death benefit may be paid directly to an eligible beneficiary or to your legal personal representative, in which case it will be dealt with as part of your estate.
This is why it is important to consider your superannuation alongside your Will as part of your broader estate planning.
Who can I nominate to receive my superannuation?
There are rules about who can be nominated to receive a superannuation death benefit.
Depending on your circumstances, eligible beneficiaries may include your spouse or de facto partner, your children, someone who is financially dependent on you or with whom you have an interdependency relationship, or your legal personal representative, which means your estate.
The requirements of your particular superannuation fund also need to be considered when making a nomination.
What is a Binding Death Benefit Nomination?
A Binding Death Benefit Nomination allows you to nominate who you want to receive your superannuation death benefit after your death.
For a Binding Death Benefit Nomination to be valid, it must meet particular legal requirements. This includes being signed and dated by you in the presence of two witnesses, who must also sign the nomination. The people witnessing the nomination must be at least 18 years old and cannot be people nominated to receive your death benefit.
If the nomination is valid and complies with the requirements of your superannuation fund and superannuation law, the trustee of the fund is required to pay your death benefit in accordance with the nomination.
Simply nominating a beneficiary online with your superannuation fund does not necessarily mean you have made a Binding Death Benefit Nomination.
What is the difference between a binding and non-binding nomination?
A valid binding nomination requires the trustee of your superannuation fund to pay your death benefit in accordance with your nomination.
A non-binding nomination records your wishes but does not require the trustee to follow them. The trustee will take the nomination into account but ultimately decides how the death benefit is paid in accordance with the fund rules and superannuation law.
Does a Binding Death Benefit Nomination expire?
It depends on the type of nomination and the rules of your superannuation fund.
A lapsing Binding Death Benefit Nomination is usually valid for three years and needs to be renewed before it expires if you want it to remain in place.
Some funds allow non-lapsing Binding Death Benefit Nominations, which remain in place until they are revoked or replaced, provided the nomination continues to comply with the fund rules and superannuation law.
What happens if I don't make a death benefit nomination?
If you do not have a valid Binding Death Benefit Nomination in place, the trustee of your superannuation fund may decide who receives your death benefit in accordance with the fund rules and superannuation law.
If you have made a non-binding nomination, the trustee may take your wishes into account, but is not required to follow them.
This may mean your superannuation is not paid in the way you expected, which is why death benefit nominations are an important part of your broader estate planning.
Should I nominate my estate or a beneficiary directly?
Whether you should nominate your legal personal representative so that your superannuation is paid to your estate, or nominate an eligible beneficiary directly, will depend on your circumstances and your broader estate plan.
The way your superannuation is paid can affect how it fits with the arrangements you have made in your Will. It is therefore important to consider your death benefit nomination as part of your estate planning rather than in isolation.
How we can help
Your superannuation can be a significant part of what you leave behind, but it does not necessarily pass according to your Will.
We can help you consider how your superannuation fits with your broader estate plan, including who you want to receive your superannuation death benefit and whether a Binding Death Benefit Nomination is appropriate for your circumstances.
If you already have a death benefit nomination in place, we can review it with you and consider whether it continues to reflect your wishes and work with the other arrangements in your estate plan.