What happens to my super when I die?

Aside from their home, most people’s biggest asset is their superannuation. With the growing housing prices, it is not hard to imagine that in the not-too-distant future, super may be the biggest asset any of us own. So, what happens to our super when we die? Is it simply distributed in accordance with the terms of our Will, or does it go somewhere else?

When you pass away, super generally doesn’t form part of your Estate to be gifted under your Will. Instead, your superannuation is dealt with by a Binding Death Nomination. This nomination is done via your superfund directly and nominates who you want to receive your superannuation and in what portions when you pass away.

There are rules however for nomination to be valid and binding. To be valid, the nomination needs to be one or more of the following beneficiaries: your husband or wife, de facto partner, your children (including adult children), anyone who is financially dependent on you at the time you pass away, anyone who you are in an interdependent relationship with (which means you live together and one or more of you provide the other with financial and/or domestic support) or to your Estate (to be distributed in accordance with the terms of your Will).

To be binding, your signature on the nomination needs to be witnessed and signed by two independent witnesses.

For example, if you wish for your superannuation to go to your adult children, that can happen by making a Binding Death Nomination leaving your super to your children. If you want your superannuation to go to a family member who does not fit into one of those categories above, you need to nominate your Estate (which is via your Will) and have your Will state where your super is to go.

As another example, if you want your super to pass to your brother when you pass away but you don’t live with your brother and he isn’t finally dependent on you, you can’t nominate him through your super.  Instead, you would make a nomination to your Estate (being your Will) and state in your Will that your super is to pass to your brother.

How you gift and structure your super is as important as how you structure your Will, so it is important to get the right advice.  At Marsdens, we advise our clients on the superannuation as part of their state Planning.  For any questions as to your superannuation nominations and how that will impact your Estate when you pass away, please contact our team.

The contents of this publication are for reference purposes only. This publication does not constitue legal advice and should not be relied upon as legal advice. Specific legal advice should always be sought separately before taking any action based on this publication.