Ensuring Your Superannuation Is Set up Correctly as Part of Your Estate Planning

 

Superannuation is your money and you have worked hard for it, it’s a key investment for your future.

Many people don’t realise that super doesn’t automatically form part of your estate and is not automatically included in your will. What you state in your will for your superannuation doesn’t necessarily mean that the nominated person/s will get your retirement savings, as the trustee of your super fund is not required to take your wishes into account. This means you need to ensure you nominate a beneficiary if you want to say who gets your retirement savings when you’re no longer here.

When you make a will, it oversees the distribution of assets you personally own, such as your house, car, and bank accounts. However, a number of people realise that you don’t own your super account personally, it is held in a trust for you by the trustee of your super fund. Under Australian superannuation laws, the trustee is the one who makes the decision about who receives your super death benefit.

To help guide the trustee on this decision, most superfunds encourage you to complete a form and legally nominate your desired beneficiary. In some cases, it can bind the trustee to follow your wishes.

There are two general options people have for how their superannuation is distributed:

  • Non-binding nomination — where a person nominates where they want the funds to go but it is up to the superfund trustee’s discretion.
  • Binding death nomination— a legally binding nomination that allows you to advise the trustee who is to receive your superannuation benefit in the event of your death.

The Australian Taxation Office (ATO) also states that if the deceased person does not nominate a beneficiary, the trustee may pay it to the deceased’s estate for the executor to distribute it according to the instructions in their will.

The next steps:

  • You need to ensure you have appropriately nominated beneficiary arrangements in place for your super money by checking the following:
    • Check your super fund offers beneficiary arrangements that suit your circumstances
    • Check that the people you are nominating are eligible
    • Complete and sign a nomination of beneficiary(s) form and send the form to your fund
    • Check if your nominations are lapsing, and make sure to review and renew them before they expire
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Talk to Us

Superannuation can be complex. If you need assistance, speak to one of Advivo’s Accountants and Advisors. Contact us today at 07 3226 1800 or email us at info@advivo.com.au