What Happens to my Superannuation?

Your interest as a member of a superannuation fund is an interest in a trust that is separate from your personal estate. It is therefore NOT automatically covered by your Will!

To determine what happens to your super when you die, you need to have a separate death benefit nomination. If your super is in a large public offer superannuation fund, the fund rules will govern the form of such death benefit nomination.

However, usually they only allow you to make a limited, non-binding, non-cascading, lapsing death benefit nomination that needs to be renewed every 3 years – otherwise the fund trustee does not have to follow the nomination at all, and they will have total discretion to decide to whom to pay your death benefit! Plus, the nomination will not let you specify a “back up” nominee if your first choice has already died.

What if you have a Self-Managed Superannuation Fund?

On the other hand, a self-managed superannuation fund (or “SMSF”) provides greater certainty in terms of what happens to your superannuation death benefit when you die. This is because an SMSF has its own trust deed which sets its own rules for making a death benefit nomination.

An SMSF can provide for a binding death benefit nomination that the fund trustee must follow – and often it can be a “non-lapsing” nomination that does not need to be regularly renewed to remain effective. Plus, you may be able to nominate further persons to receive your death benefit if your first choice has died before you (a “cascading” nomination). This flexibility can provide access to enhanced estate planning strategies and tax benefits – you can effectively have a separate “Will” for your SMSF!

WillWorks^® can create a comprehensive Non-Lapsing, Cascading, Binding Death Benefit Nomination for your SMSF, as well as update your existing SMSF trust deed to enable us to do so. For more information, please contact us to discuss your needs.

Back to Our Services.