Not sure what happens to your Superannuation money after you pass away? Here's what you need to know.
We can often get complacent with our Superannuation, a privilege that we often do not worry too much about until we actually hit retirement. However, it's a crucial part of our financial portfolio, and something that needs to be taken care of in the unfortunate event that we do pass away.
If you're not sure what happens to your Superannuation after you pass on (and more importantly who receives it) then this article may provide some clarity.
When it comes to Superannuation, we can often get complacent with its management, particularly when it comes to nominating beneficiaries and thinking about where it goes after we pass on. It's not until we get close to retirement, when we can actually access our long earned Superannuation money without tax implications that we really worry about it.
However, when it comes to creating your Legacy, your superannuation is a very important piece that must be considered. Unlike most belongings and assets, your Will doesn’t usually govern who your superannuation goes to in the event that the unexpected should occur (death or incapacitation).
In effect, if you do not specify who your Superannuation goes to after you pass away, your super fund usually has the full control in determining who receives this benefit. Thus, it is a good idea to make sure that you have nominated the individual(s) that should receive the benefits of your hard work.
Two types of Superannuation Nominations.
- Making a binding nomination. This is a written notice provided to the trustee of your super fund. A binding nomination, being in writing, means that it explicitly nominates a beneficiary for your super benefits when you pass away.
- A non-binding nomination. This type of nomination is when you indicate who you would like to receive your superannuation money, but allow your super trustee to have the final say as to who ultimately gets your super benefit.
It’s also important to note that not just anyone can be left with your super.
Note: Binding Nominations usually expire every three years. There are some superannuation funds that allow you to choose non-lapsing Binding Nomination. Such nominations do not expire and remain in place until they are revoked. You are free to revoke or change your lapsing or non-lapsing Binding Nomination at any time.
The current legislation, Superannuation Industry (Supervision) Act 1993 sets out strict guidelines as to who is entitled to receive super money. The legislation sets out that the super benefit must be paid to a ‘dependant’ of the deceased and/or their legal representative. A dependant may include the following: a spouse, de-facto partner, children (whether biological, step or adopted) and any other person in an ‘interdependency relationship’ (person living with the deceased) with the person who has passed away.
To find out more, be sure to contact your Super Fund to ensure that your affairs are in order.