Superannuation benefits aren’t considered to be an asset, so they can’t be included in a Will. Your superannuation is managed by the trustee, and you can only access it when you retire. You can ask the trustee to distribute part of your superannuation, but you can’t do anything about it until you retire.
Superannuation is a type of pension plan that provides retirement benefits to workers when they retire. In Australia, there are two types of superannuation plans, public and private. Public superannuation funds are run by government agencies such as the Australian Taxation Office (ATO). Private superannuation funds are provided by employers. You may choose to pay into either a public or private fund, but you must make sure that you do not mix them up. For example, if you contribute to both a public and a private fund, you could end up paying double tax on your savings.
Superannuation benefits are usually not included in your estate because they belong to the trustees of your super funds. Only assets owned in your name count towards your estate. You can nominate beneficiaries for your super death benefits.
Why Can’t I Leave Superannuation Benefits in My Will?
In Australia, superannuation is a type of retirement savings plan available to workers who work for an employer. This means that the money belongs to someone else, and the worker doesn’t have any control over how the money is used or invested. For example, if you leave your job, your money is still controlled by someone else. You can’t use your money to pay off debts, buy a house or pay for your children’s education. Instead, your money goes into a super fund managed by the Australian government. As long as you’re alive, you can access your super account. However, when you pass away, your estate will receive your superannuation benefits. A binding nomination means that the money goes directly to your beneficiary. You must make sure that you give this information to your super fund before you pass away.
Naming a Beneficiary for Your Super
You can also name someone other than yourself as the beneficiary of your super account. It’s important to remember that your super death benefit is protected by law.
There are other assets that aren’t included in a will and these include assets owned jointly or held in trust, such as an investment portfolio. Life insurance policies are usually excluded from probate because they’re payable to named beneficiaries.
How Can I Bequeath My Superannuation?
Superannuation benefits are an important part of retirement savings. There are many ways to leave your superannuation benefits to beneficiaries. You can nominate them yourself or use a binding nomination form.
Your legal representative can also be nominated as the beneficiary of your fund. Then he/she can distribute the money according to your Will if you haven’t already done so. If you do this, you must keep your Will beneficiaries and Binding Nomination up to date. You must also have a superannuation clause written into your will.
A binding nomination is an agreement made by the deceased person with the superannuation fund or trustee about how the funds should be paid out after the person dies. This means that the nominated recipient gets the money even if there is no Will. The nominee must be someone who is related to the deceased (for example, children, grandchildren, siblings) or someone else who is named in the Will. The nominee must also be alive when the Will is signed.
If you’re looking for ways to divide superannuation benefits among siblings, check out this recent blog post.
How to Make a Binding Nomination With a Superannuation Fund
A binding nomination form is necessary when making a superannuation distribution. You need to complete an online form before your nomination expires. Your nominee needs to be named on the form, and your beneficiary details need to be entered. Make sure to contact your superannuation fund for the correct form that must be completed. This is usually a quick and easy process and can usually be done online.
Dependents Under Superannuation Law
You are a dependent of your husband/wife if you are married or in a de facto relationship with him/her. You are also a dependent if you are a child of the deceased. You can also be considered if there is an interdependency relationship. This could include sharing a house, provision of financial support or having a close relationship. Your parents can help you receive their superannuation benefits by filling out binding nomination forms online. To make sure super goes to your chosen beneficiary, make sure to contact your super fund or financial adviser. You may need to contact your insurer first if you want to change beneficiaries. It’s important to get this all in order as part of your estate plan.
Tax Benefits of Superannuation
The owner of the superannuation benefits would have had the money paid by their employer taxed at 15% (with a few exceptions to the rule. Check with the ATO or a financial adviser for detailed advice). If a person inherits someone’s superannuation benefits after they die, they may have to pay tax on some of the benefit. It’s important to get expert advice about any questions to do with taxation.
It’s always important to consider tax implications as tax may apply to some beneficiaries.
If I Don’t Make a Binding Nomination, What Happens?
Your estate will get the money if you didn’t make a binding nomination or if you let it expire. A lapsing binding nomination is only current for 3 years so be sure to update it before it expires. Alternatively, you can make a non-lapsing death benefit nomination that will not lapse until the trustee is updated with a new nomination. While you can choose who gets the money from your superannuation fund, you must follow the correct procedures to be sure that your wishes are carried out. Find out more about superannuation binding death benefit nominations here.
Superannuation Benefits and Professional Legal Advice
Make sure to talk to a specialist wills and estates lawyer like Simons Ravden Wills and Estates Law to understand how superannuation affects your estate and to be sure your superannuation benefits go to the people you choose.