Superannuation in your Will

Superannuation in your Will

Superannuation in your Will

Superannuation benefits can be a significant part of your estate so we recommend that you consider who will be entitled to those benefits when you die and how you should treat them in your will. (You do have a will right?)

Who owns your superannuation?

Most people would consider that their superannuation is owned by them. And as such, they are free to do with it as they please as long as they comply with the rules relevant to retirement. However, this is not correct. Your superannuation is actually owned by the trustee of your superannuation fund and you are a beneficiary. That trustee has an obligation to hold those funds for your benefit but does retain some control over how they may be dispersed in the event of your death so you need to treat them different to other gifts in your will.

Nominating a beneficiary of your superannuation

To avoid any uncertainty, you may choose to make a Binding Nomination (see an example here) at any time prior to your death in which case your superannuation fund is required to pay your benefits to the beneficiaries you have nominated. You may wish to nominate your spouse, children or another financial dependant or more than one person (in which case you will need to specify how the benefits are to be split between them). Using this method, the benefits will ‘skip’ your estate and never be subject to the will.

If you wish to make a Binding Nomination, you will need to contact your superannuation fund and complete the appropriate form. It is important to note that binding nominations must be renewed every 3 years. Your superannuation fund should advise you when your nomination is about to expire. If you have a binding nomination in place, it is important to review it regularly and amend your beneficiaries if your circumstances change.

Alternatively, you may nominate your estate so that the benefits can be distributed in accordance with your will.

There are certain advantages to nominating a beneficiary rather than having your superannuation benefits paid to your estate and distributed in accordance with your will. However there may be adverse tax consequences for the beneficiaries using this method. What is right for you will depend on your individual circumstances and the circumstances of the beneficiaries.

Treatment of superannuation in your will

In your will, you may also indicate your intentions by including a clause specifying how you wish your superannuation benefits to be paid. We would usually recommend a clause requesting that the financial circumstances of the beneficiary be considered prior to the benefit being paid. You should ensure that your will aligns with your nominated beneficiary to avoid any confusion. This also provides a backup in case you fail to make a Binding Nomination or your Binding Nomination expires and is not renewed prior to your death.

As with all estate related matters, there are many issues that arise that are dependent on your circumstances and the circumstances of your intended beneficiaries. To get advice from expert estate planning lawyers, please call Certus Legal Group on 07 3106 3016 or contact us using the form on this page.

This article does not give legal advice and should not be relied upon as such. It is intended to provide general and summary information on legal topics, current at the time of first publication. You should seek professional legal advice before acting or relying on any of the content contained herein.