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Outside of owning any property, superannuation is probably the biggest single asset most of us have, so it’s important to know what will happen to your super when you die.
The average Australian has around $147,000 in superannuation, according to 2022 figures. But how many people are aware of the importance of nominating a beneficiary to make sure your super goes where you want it to go when you’re gone?
It’s been compulsory for employers to contribute to our super for the past 30 years, and while we spend a lifetime meticulously deciding on investments and super products, what happens to the distribution of these funds when you die can be derailed if the correct paperwork hasn’t been completed.
For example, a Will is a legal document that sets out who will get your assets and possessions when you die. But it’s important to note that your superannuation death benefits don’t automatically form part of your estate and aren’t governed by the directives set out in a Will unless you take some specific steps.
What could happen to your super when you die?
What happens to your super when you die depends on what arrangements, if any, you’ve made. In some cases, any superannuation funds may be paid out to a deceased person’s dependents outside of their estate.
There’ve been instances where the deceased has directed their super go to their friends, grandchildren or siblings, only to have it ruled as an invalid nomination due to the rules governing that particular superannuation fund.
According to the Superannuation Industry (Supervision) Act (“SIS Act”), death benefits are restricted to a member’s dependents or legal personal representative. It’s important to know who is considered a “dependent” to understand who can receive the deceased’s superannuation.
This is an extract from an article written by Matthew Hoang for Canstar, published on 15th March 2023.
Read the full op-ed below:
Read the full story: What happens to your super when you die? - The Australian
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