Benefits under superannuation policies do not necessarily form part of a deceased person’s estate. Many people choose to nominate a beneficiary such as a spouse or children, and nominate the percentage split or monetary amounts to go to those nominated persons. If there is a binding nomination made, on death the superannuation benefit will be paid to the beneficiaries nominated by the owner of the policy.

Some nominations are binding and others are not, some are lapsing (having to be renewed every 3 years or so) and others are non-lapsing. Each policy should be reviewed carefully as part of an overall estate plan.

If the estate is nominated as the beneficiary or there is no nomination made, the proceeds will generally either (in the trustee’s discretion) be paid:

• to your dependants (your spouse, children and people with whom you had an 'interdependent' relationship, including same-sex and de facto partners, or those who depend on you); or
• into the estate and distributed according to the will,

however where there is a claim on an estate, the beneficiaries stated on the Will may not share in the estate in the way that the testator (the person who made the will) wanted them to.

One benefit of nominating a beneficiary of a superannuation benefit is that that asset does not form part of your estate and is therefore not open to challenge under the Succession Act 2006 (NSW) in the same way as assets that do form part of your estate.

Many life insurance policies are held in superannuation funds so that the premiums can be deductible as contributions to super. In the same way as standard death benefits can be paid by way of binding nominations, the beneficiaries of those super life policies can also be named by way of binding nominations.

Contact us

We can assist you in relation to any superannuation issue from binding and non-binding nominations and implementing estate planning measures to the establishment of Self Managed Superannuation Funds and amendments to Superannuation Fund Deeds and can liaise with your accountant, tax advisor and/or financial planner to seek to ensure every issue has been considered.

We can also draft Property Custodian Trust Deeds (also known as “Security Trust Deeds” and “Asset Trust Deeds”) for people who wish to invest in property using funds held in super and liaise with lenders in relation to the implementation of the arrangements as well as dealing with all conveyancing issues for you.

Call one of our Estate Planning Lawyers for free initial telephone advice on your circumstances and estate planning needs on (02) 9525 8688.