Your Will does not and cannot automatically cover who gets your unused superannuation when you die
People are often surprised to learn your Will doesn’t automatically cover what happens to your Superannuation Death Benefits (i.e. your superannuation member balance and any insurance payable from your super fund) when you die.
You need to have a current Binding Death Benefit Nomination lodged with your super fund to be sure they will pay your Superannuation Death Benefits to the person(s) you choose when you die .
When I talk with my clients about what’s going to happen to their unused super when they die, nine times out of ten they say ‘it’s sorted, I’ve done an online nomination with my super fund’….they are then shocked when I tell them that an online nomination is not binding on the superannuation fund, meaning it will still be up to the super fund to decide who gets your Superannuation Death Benefits when you pass away.
People are also often not aware there are strict rules limiting who is able to receive your Superannuation Death Benefits when you die.
You can’t nominate your Superannuation Death Benefits to go to a friend, or to any family members (other than a spouse or child). So, if you don’t have a spouse or children your Superannuation Death Benefits need to be left to your estate, from where the executor named in your Will distributes them to the people you’ve named in your Will.
Superannuation Death Benefits are often the largest assets a person has when they pass away, especially if the death occurs during the person’s working stage of life.
In our experience the Superannuation Death Benefits of younger and working age people are often needed urgently following the death, to pay off personal debts such as a home loans, mortgages, car loans and credit cards and minimise interest and other penalises accruing for non-payment of debts.
It is therefore vital, particularly for younger and working aged people, to have a current Binding Death Benefit Nomination ensuring access to your Superannuation Death Benefits as quickly as possible after your death, without the need for arguments with your super fund, at what is already a stressful and emotional time as they grieve your loss.
Having taken the time to read the above I am sure you’d agree, certainty and control over what happens with your Superannuation Death Benefits is a crucial component of your estate planning. Please reach out to one our lawyers in our Wills, Estates and Estate Planning team at Aubrey Brown Lawyers for assistance with your Binding Death Benefit Nomination.
As always, it will be our pleasure to help get this important and often overlooked part of your estate plan right for you.
Please contact our office on 43503333