Thinking and planning now about what to do with your assets after you’ve gone, can save a lot of headaches and heartaches for your families.

Many people don’t realise that when they’re drafting a will, their super benefit does not automatically form part of their estate.

Generally, only assets owned in your name, such as your house, car, investments, savings and so on, make up your estate and can be dealt with under your will.

Your super benefit, on the other hand, is held in trust by the trustee of your super fund and different rules apply. The main thing to know is that the trustee will decide how your super benefit is paid after you die.

Also, under the superannuation rules, certain people may make a claim on your super benefit that you don’t want to claim. By nominating beneficiaries for your super death benefit, you can be much more certain who your super will go to.  Other assets not included in your will include assets or property owned as a joint tenant, assets held in trust, assets owned by a company and life insurance paid directly to beneficiaries.

What happens if I don’t nominate a beneficiary for my super?

If you don’t make a nomination, or your nomination becomes invalid, the trustee will decide how your super benefit will be paid out after your death. The trustee will be guided by super law should this need occur.

How do I leave my super to my children?

If you want to leave your super to your children, you can make a binding death benefit nomination, which can be either lapsing or non-lapsing. Lapsing nominations must be renewed every three years, while non-lapsing nominations will stay in place until the trustee receives a new or updated nomination.

If my child is not dependent on me, are they treated differently?

For the purpose of receiving a super death benefit, children are considered to be either dependent or non-dependent beneficiaries. The main difference is the way the death benefit is taxed when it is paid.

If a child is a dependent beneficiary, then the money they receive is tax free. If the child is a non-dependent beneficiary, then the death benefit is subject to tax.

Can I leave my super to my nieces or nephews or charity?

Generally, the law requires a trustee of a super fund to pay a death benefit to a dependent beneficiary or your estate.

Nieces, nephews or charities are not generally considered to be dependent beneficiaries. Dependent beneficiaries are your spouse, your children, anyone who is in an interdependent relationship with you or any other person who, at the date of your death, was wholly or partly financially dependent on you. Special arrangements may apply for beneficiaries who are under the legal age of 18 years or who cannot manage their own affairs.

So if you are keen to leave you super benefit to someone else, like a niece or nephew, you could make arrangements for your benefit to be paid to your estate.

As long as you have an up-to-date will, you can make a binding non-lapsing death benefit nomination to your legal representative.

Then your super benefit will be paid to your estate and paid out according to your will, as long as it is valid at the time the death benefit is assessed.

When is a death benefit nomination for my super benefit invalid?

A death benefit nomination for your super benefit may be invalid if:

  • the percentage allocation you requested does not add up to 100%
  • the form has been incorrectly witnessed
  • the form has been incorrectly signed and dated
  • one or more beneficiaries nominated are not defined as dependants under superannuation law or the legal personal representative of your estate
  • the person you nominated as a dependant is no longer a dependant, e.g. you have divorced your former spouse
  • if you have made a lapsing binding nomination which has expired and has not been renewed (a lapsing binding nomination is valid for three years from the date it is signed)
  • the nomination has been revoked (or cancelled) and a new nomination has not been made.

Are your beneficiaries up-to-date?

Nominate yours today

Need help?

Visit us to find all the forms and for more information on nominating beneficiaries.

Our financial planners can also discuss estate planning, the tax implications and the different types of beneficiary nominations available. You can make an appointment online or call us.

Don’t forget about your digital assets

There actually is a thing called “digital estate planning”. Just like a will, a digital estate plan can help your family to find, access, value, and appropriately distribute or take care of your virtual assets after your death. In many cases, it can form part of your will.

Digital assets can include personal data, intellectual property rights or online accounts and could be held in cloud storage facilities, photos, videos, blogs, email accounts, social networks and more. Make a list of your digital assets, including where they’re held and how they can be accessed. Store usernames and passwords in separate places to minimise the risk of theft. Then choose someone you trust with this confidential information who will follow through with your instructions.