Posted on: 20 November 2015
Some 45% of Australians do not have a valid will. A comprehensive will is perhaps the most important aspect of estate planning, so it's vital that you have one. When you are determining which of your beneficiaries will receive your assets, you also need to think about another asset that each working Australian has. While your superannuation can certainly be bequeathed to a certain person (or people), there is a specific process for doing so. So how do you ensure that the right people receive your superannuation in the event of your death?
A Different Type of Asset
You cannot bequeath your superannuation to someone via your will. This is a common mistake for those who have completed a DIY will kit, but superannuation is classified as a different type of asset than those that are more tangible, such as your savings account or your home and possessions. If you have listed a recipient for your superannuation in your will, the trustee of the superannuation fund will view it as a suggestion. This is considered to be a non-binding death benefit nomination.
The Correct Paperwork
You will need a binding death benefit nomination to ensure that your super is given to the person (or people) whom you have chosen. It's as simple as filling out the appropriate paperwork, which you can obtain from your superannuation provider. If you have accounts with multiple providers, you will need to complete a different nomination form for each provider. If you have multiple accounts with the same provider, you can generally fill in one form to cover all these accounts.
Without the Correct Paperwork
If you do not complete a binding death benefit nomination, your superannuation fund will usually give the amount to one of the primary beneficiaries of your estate. This is typically your spouse, your de facto partner, or your children. A binding death benefit nomination allows you to determine which percentage of the overall amount each person receives. It also allows you to bequeath a percentage of the superannuation fund to anyone else you choose. You can nominate a single beneficiary or as many as you like.
Doing the Maths
Since the actual amount of superannuation that will have been accrued is not yet known, you will not know the exact monetary figure each recipient will inherit. You will instead need to assign each recipient a percentage. If you are nominating multiple recipients, you will need to ensure that the combined percentages add up to 100%.
Please remember to notify your superannuation provider if you wish to amend your binding death benefit nomination, which might occur if your circumstances change (such as in the event of a divorce). You are free to change the information at any time, and some superannuation providers will require you to renew the form every few years, although this is dependent on the provider's own policies.
It's not a happy thing to consider, but it's important to ensure that your superannuation will go to the right people in the event of your death.Share