October 20, 2017

Superannuation and Estate Planning

Certain people have super accounts, whether a retail or industry super funds or a self-managed super funds. Super accounts accumulate for the sole purpose to ultimately provide for us during retirement but what happens to your super balance on death?

A self-managed super fund (SMSF) is a private super fund often set up by your accountant which you (or another member of the SMSF) manage yourself and make decisions as a trustee of the SMSF.

Retail or industry super funds are managed for you by an independent trustee with varying degrees of control depending on which fund you are with as to how your money is invested.

In the absence of a valid death nomination being signed by you as the member of a SMSF, the trustee of the SMSF will generally decide to pay a death benefit to your dependant(s) on your death. In some circumstances for an SMSF, it may be necessary for a Court to decide, which can be very expensive.

In the absence of a valid death nomination being signed by you as the member of an industry or retail fund, the trustee will generally make contact with all next-of-kin and person(s) who may have had a dependant or interdependent relationship with you prior to your death. Once all the requisite forms have been returned to the trustee of the fund, the trustee will make the decision as to who they believe should receive your super balance based on the information

So if my Will can’t direct the trustee of the super fund to pay my super benefit as I wish, what can?

Most SMSF, industry and retail super funds will let you nominate who you want to have your death benefit paid to by signing a Death Nomination.

Death Nominations can be binding on the trustee or non-binding on the trustee of the fund; the nominations can lapse after a period of time (usually 3 years), they can be non-lapsing or reversionary (such as to a surviving spouse).

If you don’t have a valid Death Nomination, the trustee of your super fund will decide who your death benefit gets paid to.

If you want your super balance to get paid according to a provision in your Will, you will need your Death Nomination to direct the trustee to pay to your legal personal representative or estate.

Super forms part of your estate planning; contact Mbt Lawyers to see one of our expert lawyers about your estate planning today.

You’re in expert hands.

 

02 6648 7600