When most people think about estate planning, they imagine writing a will that says who gets what when they pass away. But here’s the twist: in Australia, your superannuation isn’t automatically covered by your Will. That surprises a lot of people – and it’s one of the most common questions financial advisers receive around estate planning.
So why isn’t it included? Well, because, technically, your super isn’t your money (yet). That is, it’s not a personally-owned asset, – It’s money held in a trust by your super fund. That means the trustee (not you) decides where it goes when you die.
Unless you’ve made a binding death benefit nomination, your super fund has the final say. You can nominate someone to receive your super, but unless it’s binding, the trustee can override it based on who they think is most eligible – usually a spouse, child, or dependant.
So if you want to be sure your super goes to the right person, just writing it into your Will isn’t enough. You need to make a formal nomination with your super fund. (For example, by completing a Binding Death Benefit Nomination form, which is usually available on your super fund’s website.)
It’s one of those estate planning quirks that’s easy to overlook – but getting it right can make a huge difference for your loved ones.
Seeking professional financial advice when planning your estate can bring peace of mind, now and in the future.
To make an appointment, call me at Align Financial on (02) 9913 9995.
