Did you know the provisions in your Will do not necessarily determine where the proceeds of your superannuation go? A recent case highlighted the importance of ensuring your testamentary intentions are properly documented for your superannuation.
The deceased’s girlfriend, who he had been living with for 9 months before he died, was awarded the vast majority of his superannuation ($352,170), leaving his two young daughters with less than one quarter of his superannuation ($49,664 each).
In a nutshell, your estate will be separated into two asset pools
- Proceeds of Superannuation; and
- Everything else.
Generally, your Will determines who receives ‘everything else’ in your estate upon your death.
Each superannuation fund has their own trustees who determine what will happen with your superannuation account and any associated death benefit.
How can you ensure where the proceeds of your superannuation policy end up?
Most superannuation companies have a form available called a ‘Binding Death Benefit Nomination’. By completing this form correctly (usually involving two witnesses to your signature) you are directing the superannuation company to pay out any benefit in accordance with your instructions. You can vary or revoke this nomination at any time.
Many Binding Death Benefit Nominations will lapse after a certain period of time, usually 3 years. This means you must ensure you keep updating the forms. Some companies offer the benefit of a ‘non-lapsing’ binding nomination which means that your directions will last indefinitely.
Alternatively, you may have the option of making a ‘preferred nomination’. This directs the superannuation company to take into account your instructions when making their determination, but does not bind them.
If you do not have a nomination in place, the trustee of the superannuation company will ultimately determine to whom the proceeds will be paid and in what amount.
Particularly for younger persons, your superannuation may form the biggest part of your estate and it is important to seek expert knowledge to fully appreciate its advantages and its dangers avoided.
Book an appointment with Duffy Elliott Lawyers experienced estate planning team to ensure your final wishes are carried out.
 Various other exceptions that may not be governed by your Will include some life insurance policies, joint tenancies and assets held within a trust.
 You can direct that a superannuation company pay the benefit to the legal personal representative of your estate (executor), to be disbursed in accordance with your Will. If you are considering this option, it is advised to speak to an accountant about any taxation implications.
 A Binding Death Benefit Nomination will usually continue as a preferred nomination if it has expired.