Most Australians are unaware that they must give directions to their Super Fund if they wish to control what happens to their Super when they die.
The law and the Super Funds have rules which affect your Super.
There are important facts that you need to know about your super and death and they are:
- Your Super is not an asset that will automatically become part of your estate on death, because the balances of your Super are held by your super fund trustees on your behalf and not directly by you like, for example, your bank accounts. Therefore, at your death, the Super Fund Trustees will have a say in how your Super is paid out.
- The beneficiary you named on the form you joined the industry or retail Super Fund with does not necessarily receive your Super. The Super Fund Trust Deed will have rules that determine who receives the proceeds and, in addition, the law in Australia has conditions on who can receive your Super.
- If you have a self-managed super fund, another person will become a trustee to replace you at your death. That person is usually your legal personal representative (the executor of your Will) or the person nominated in your self-managed super Trust Deed. However, if you have not made a Will it will be a family member or possibly the Public Trustee who takes that role. This trustee may not pay your super as you would have, and may not take into consideration the taxation implications for the beneficiary they decide to pay to. So, to be sure you direct your super to the beneficiary/s of your choice, have a current Will in place at all times.
- You may be able to direct your Super Fund, including a self-managed super fund, to pay your Super to your spouse or children by way of a Binding Death Benefit Nomination. Enquire of your Super Fund, or their website, if this form is available for you to complete. When this nomination is completed, signed, witnessed and received by your Super Fund, the super fund trustees are required to abide by this instruction.
- There may be taxation implications on Super paid after your death. Tax on Superannuation, and the Death Benefits which may also be paid with your Super proceeds, is a complex matter and requires the advice of a financial planner, taxation accountant or superannuation/taxation specialist solicitor.
If you have any queries regarding the above, please do not hesitate to contact us at Big Law Solicitors on (07) 3482 6999 or email us at mail@biglaw.com.au.
