Super Certainty

Most of us want the certainty of knowing where our superannuation benefits will go when we eventually pass away. You may be surprised to know that your super death benefit does not legally form part of your estate and therefore your Will does not control how this money is to be treated. In the absence of a nominated trustee, the decision is left to the trustee.

What is my super death benefit?

This includes your super fund balance at the time you pass away plus any insurance payment made as a result of insurance held as part of your super fund membership.

What happens to my death benefit if I were to pass away?

The trustees of your super fund are required to pay your death benefit to either a dependent, as prescribed under the Superannuation Industry (Supervision) Act, or to your Estate. A SIS dependent includes your spouse (includes de-facto), your children (of any age and step/adopted), any person ‘financially dependent’ on you and any person with whom you have an ‘interdependency relationship’.

Note: a dependent under SIS legislation may differ from a dependent prescribed under tax legislation (ITAA 97).

Why nominate a beneficiary?

There are three main reasons why you should nominate a beneficiary:

What types of nominations are there?

You can nominate a beneficiary using either a ‘non-lapsing binding’ or a ‘non-binding’ nomination.

A ‘non-lapsing binding nomination’ will bind the trustee to your decision, and lets you name:

• A dependent (under SIS regulations), or
• Your ‘Legal Personal Representative’, who must distribute your benefit according to your will or according to law if you have no will.