A common misunderstanding

It’s a common misunderstanding that your superannuation, like everything else you own, can be dealt with in your Will.

However, superannuation is technically a trust, not a ‘personally held asset’, so it cannot be covered by a Will.

Even if superannuation is specifically referred to in a Will, it does not make it an asset subject to the terms of the Will.

This means it is essential to plan for what happens to your superannuation death benefits to ensure it goes to the people you want it to go to when you die.

In addition, how you structure your estate plan can have significant tax consequences for your estate and beneficiaries. It’s important to take all of these things into consideration when planning for the distribution of your superannuation death benefits.

Death Benefit planning

Planning what happens to your superannuation benefits after you die is commonly referred to as ‘death benefit planning’. The rules of most superannuation funds mean you can nominate who is to receive your superannuation death benefit.

There are generally two options

	DIRECTS WHO THE DEATH BENEFIT IS TO BE PAID TO AND HOW MUCH THEY ARE TO RECEIVE	THE TRUSTEE OF THE FUND IS BOUND TO FOLLOW THE NOMINATION.
Binding death benefit nomination (BDBN)	YES	YES
Discretionary death benefit nomination	YES