Show download pdf controls
  • What happens to our super when we die?

    Most of us do not like talking about the end of life, however it is important to remind clients to think about what they want to happen to their superannuation following their death.

    After death an individual's super balance and any insurance benefit, is usually paid to their dependants or legal representative. To ensure the individual has control over who receives their super following their death, it is essential that they advise their super fund by nominating their beneficiaries. There are two types of nominations when nominating a beneficiary:

    • Non-binding nomination
      • where the trustee of their super fund will decide who to pay their death benefit to. The benefit will be paid at the discretion of the trustee to those considered to be financially dependent on the individual.
       
    • Binding nomination
      • where the trustee of their super fund is required, by superannuation law, to pay their benefit to the person(s) they have nominated when they die.
       

    It’s important to remind clients to take the time to ensure they have nominated a valid beneficiary through their super fund.

    If the individual has no eligible dependants or wishes to direct their death benefit to others that are not valid dependants, they can nominate their super to be paid to their personal legal representative to be included in the estate. If the individual does not make a nomination, then the fund trustee will have the discretion to pay the death benefit in accordance with the fund rules and legislation.

    Members of a self-managed super fund (SMSF) also need to nominate who will get their benefits. A binding death benefit nomination directs the SMSF trustee to pay the benefit to a legal personal representative or a dependant. Without a binding nomination, the remaining trustees will decide how the benefits are distributed by considering the trust deed and super laws.

    See also:

    Keep up to date:

      Last modified: 23 Sep 2021QC 66849