Did you know that superannuation is an asset which does not automatically form part of your estate when you die? Simply putting your wishes into your will may not be sufficient to make a gift from your superannuation. To distribute your superannuation in accordance with your wishes, you need to make sure you give specific directions to your superannuation fund.
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Your policy or trust deed should allow you to provide a death benefit nomination. This is separate from your will and some funds require these nominations to be updated every three years.
In your death benefit nomination, you can either nominate dependents to receive your superannuation proceeds, or you can nominate your estate to receive the proceeds. If you nominate your estate, the proceeds of the superannuation fund will then be paid into your estate and distributed in accordance with your will.
If you make no nomination, the trustee will normally have the power to distribute your superannuation benefits among any of your dependents and your estate in whatever portions it believes to be fair and reasonable.
There can be tax consequences arising from a distribution of superannuation, which should be taken into consideration when making your nomination, in consultation with a professional such as a financial planner or a solicitor.
Given the complex nature of wills and superannuation, professional legal and estate planning advice should always be sought.
Have you updated your death benefit nomination lately?
