Superannuation is not automatically covered by your Will
Superannuation Beneficiary Estate Planning
For many of us, superannuation is one of our biggest assets. It may even be worth more than the family home. But did you know that your superannuation death benefits are not automatically covered by the terms of your Will and that if you pass away your superannuation may not be paid to the people that you intend?
Your superannuation is governed by the terms of the trust deed that established the super fund, and by legislation. Australian superfunds have their own requirements that must be followed in order for them to be bound to pay a super death benefit in accordance with your wishes. If the correct documentation is not in place, it is usual for the Trustee of the superfund to make a decision on who will receive your super death benefit. The same is true of your self managed super fund.
Putting the right documents in place for your Super
It is not as simple as downloading a binding death benefit nomination form from your super fund and filling it in. The death benefit nomination must align with other aspects of your estate plan, particularly your Will. Also, many Super funds provide that their death benefit nominations lapse every 3 years and cannot be renewed if you have lost capacity. Having ‘back up’ measures in your other estate planning documents to cater for this scenario is prudent.
Is there a tax on my super death benefit?
There could well be a tax on your super death benefit – it depends on who the beneficiary is. You must consider the tax implications of your superannuation passing to certain beneficiaries (such as independent adult children) and whether there are more tax effective alternatives that may be available to you. We are able to provide you with advice on how to potentially save this death benefit tax as part of your overall estate plan.
A comprehensive estate plan
You need an estate plan, which covers your Will, superannuation and other assets not governed by your Will. We can also ensure that comprehensive financial terms are included in your Enduring Power of Attorney document so that your attorneys can appropriately deal with your superannuation interests if you lose capacity due to accident or illness (for example, withdrawing super, renewing your death benefit nomination when it lapses, and so on).
At Estate First Lawyers, we specialise in superannuation estate planning (including self managed super funds) and will advise you on your best options. We will also provide you with a fixed fee quote at your first consultation.
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Final Document Meeting
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