Superannuation: What Happens When You Die?
Death is always a very uncomfortable topic. It’s not something many people like to talk about.
As you grow older taking the time to sit down and work out what you want to happen with your super once you pass is very important. When the time comes, you will want to make sure your remaining super goes to your loved ones and family.
Our team of lawyers have put together some points that you should take into consideration when deciding what to do with your super.
1. Don’t Expect Your Will to Cover Your Super
It’s a common mistake that many people make. Don’t assume that your Will will cover any remaining Super you have once you pass. This is because your Will only covers assets that you own. Although you may think that you “own” your Super, it is actually money that is held in a trust account for you.
Consulting with a lawyer when planning your Will ensures that you make well-informed decisions that benefits your loved ones even after death.
2. Who Can I Leave My Super To?
As part of a Super fund, in the event of a person’s death the fund is required to pay a death benefit. This benefit must be paid to someone who is eligible to receive the money, this person is known as a Super Beneficiary. This person can either be your spouse, a partner, a child or anyone who is financially dependant on you at the time of your passing.
If you don’t want to leave your remaining Super to anyone listed above you can do so. To do this, you will need to make a binding nomination that your estate or a legal personal representative is your beneficiary. If you do choose this option you will need to make sure your Will is up to date so any remaining money can be properly distributed.
3. Types of Beneficiaries
When the time comes to specify your beneficiaries, many Super Funds will give you a number of options. You can choose from Binding Nominations, Non-Binding Nomination, Reversionary Beneficiary Nomination or No Nomination.
All of these options can become very confusing so it pays to speak to a professional before making any final decisions. You don’t want to pick blindly when it comes to your Super. Make sure you have LHD Lawyers on hand to help you make the best decision for your situation.
4. What Happens If I Don’t Choose a Beneficiary?
If you choose not to elect a beneficiary then the trustee of your Super Fund with decide who receives your death benefit. Your trustee must pay the benefit to either one or more of your dependents (people who have been financially dependant on you at the time of your death) or to your estate which will then be distributed according to your Will.
5. Need Help?
We understand that dealing with Super Fund legalities can be extremely confusing. Our expert lawyers have vast experience dealing with Super Funds and helping everyday Australians choose a beneficiary. We can also help you write up and new Will or make changes to an existing one.
If you need any help understanding your Super Fund contact us on 1800 838 481. Our lawyers have experience dealing with Super Funds and Wills. We can ensure your wishes are followed once you have passed, giving you peace of mind.