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Home | Blog | Superannuation – Who gets it when you die?

Surprisingly, your superannuation benefit does not automatically form part of your estate and can be substantial when it includes a death insurance component. Your superannuation benefit is held in trust by the Trustee of your super fund. Where there is no binding nomination, the Trustee of your fund decides how your superannuation benefit is paid after you pass away. Under these rules, there are people who may be able to make a claim on your superannuation benefit that you would not have nominated.

The Trustee of your super fund will normally choose from a range of your taxation dependants.

Most superannuation trust deeds define a dependant as:

    • the deceased member’s spouse (including a de facto spouse);
    • children (including step children, ex-nuptial children and adopted children); and
    • any other person who was wholly or partially dependant on the deceased member at the date of death.

Binding Nominations

If a valid binding death benefit nomination is in force at the time of death, the trustee of the superannuation fund no longer has discretion about who to pay the superannuation entitlements to. The Trustee must then pay your superannuation entitlements to your nominated beneficiary.

A binding nomination must be renewed every three (3) years, unless it is a non-lapsing nomination.

Death Benefits Complaints

If a family member objects to the Trustee’s proposal, a complaint can be made to the Superannuation Complaints Tribunal (“SCT”).

Complaints regarding a death benefit include:

  • complaints about the distribution or apportionment of the benefit among beneficiaries; and
  • complaints about the amount of the benefit payable.

A complaint to the SCT can be costly and cause additional stress and anxiety in an already stressful experience of losing a loved one. By making a binding death nomination you are removing all uncertainty from the decision-making process and ensuring the Trustee does not distribute your super death benefit unfairly. It allows you to also determine exactly what each beneficiary receives, which can eliminate costly litigation between dependants following your death.

If you would like further information on binding nominations or would like to discuss objecting to a payment by a superannuation fund, please contact our Wills and Estates Lawyers on (07) 3025 9000.

Get to know our Wills and Estates solicitor

Jenna Hutchinson is employed as a Senior Associate in Turner Freeman’s Brisbane office. Over the past 2 years, Jenna has worked exclusively in the area of Succession Law as this is where her passion lies.

Jenna always strives to do the best she can for her clients to ensure that their wishes are adhered to, as well as tries to achieve the best outcome for her clients if they have been unfairly left out of a Will. She is also experienced in defending the Estate against complex claims.

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