Can I Leave My Super Benefits In My Will?
Many people assume, and understandably so, that your superannuation can simply be assigned to a beneficiary in your Will... Wrong!
The problem with assigning superannuation (‘super’) benefits in your Will is that the funds aren’t actually considered to be an asset in your possession, thus assigning those funds to a beneficiary cannot occur in the usual fashion that a sum of money could be assigned.
The super is money invested by the fund managing your super, these funds control that money to ensure it is invested on your behalf so you can have a maximised return. Because the fund has possession of that money, they (or more specifically the trustee of that super fund) can decide on how your super is dispersed after you die. However, you can provide guidance to the fund’s trustee by assigning the super to a beneficiary or beneficiaries via instruments external to your Will.
To assign super to a beneficiary you need to complete a Binding Death Benefit Nomination. This document allows you to nominate the person or persons you seek to benefit from the balance of your super.
Ideally, this nomination process should be finalised at the same time you are completing your Will.
Failure to complete a Binding Death Benefit Nomination will likely result in the funds being assigned to your estate and distributed accordingly. This sounds okay, however this is not guaranteed, and you evidently lose an element of control over where those funds go.
When nominating a beneficiary with your super fund be mindful that most Australian jurisdictions require any super payout to be assigned to a dependent of your estate; you can’t assign it to Bob down the street or your favourite footy team. The super needs to be allocated to someone who was wholly or partly financially dependent on you.
But what if you want it to go to a particular person who isn’t a dependent? Then you can organise for your super to be assigned to your estate, from there you can assign funds from your estate to be assigned to the beneficiaries according to your Will.
In conclusion, completing a Binding Death Benefit Nomination is the key to securing the allocation of your super funds. If you already have a Will in place, we can review it and advise if this paperwork would be of benefit to you and your Estate. Contact us for a confidential discussion.
Please note, this article is general in nature and does not take into account your personal situation or circumstances. For further information please contact Kenney Legal at info@kenneylegal.com.au or contact us via our social media networks.