28th May, 2024
What Happens to Your Superannuation When You Die?
When planning your estate, it’s crucial to understand that your superannuation is not automatically included in your Will. This means that the beneficiaries named in your Will might not receive the benefits from your super fund unless you take specific actions.
Binding vs. Non-Binding Nominations
To ensure your superannuation benefits go to the intended recipients, you need to make a binding beneficiary nomination with your super fund. A binding nomination requires the fund manager to follow your instructions, provided the nomination is valid and the beneficiaries are eligible dependants under superannuation law or your legal personal representative. Valid nominations must be updated every three years to remain binding.
A non-binding nomination, on the other hand, serves as a guide for the fund manager, who has discretion over the final decision. This could result in the super benefits being distributed in a manner contrary to your wishes, making binding nominations a safer choice for those with specific intentions.
Who is involved?
Under superannuation law, a dependant can include your spouse, children, anyone financially dependent on you, or individual with whom you were in an interdependency relationship with.
Your legal personal representative, typically the executor of your Will, can also be nominated. This ensures your superannuation benefits become part of your estate and are distributed according to your Will.
Keeping your superfund nomination up to date is crucial, particularly after significant life changes. Consulting with a lawyer can help ensure your nominations are valid and reflect your current wishes, providing peace of mind that your superannuation will be distributed as intended.
At Castrikum Adams Legal we are highly skilled in estate planning and can provide the guidance you need to manage your superannuation and ensure your loved ones are taken care of. Contact us on (02) 6687 1167 today to discuss all your estate planning needs.