Nobody likes to think about the end of their life, but planning for your departure ensures that your money and possessions end up in the right hands. You can’t make those decisions once you’re gone, so it’s important that you make them now, and in doing so, you prevent infighting with your family and legal woes.
What Is Superannuation?
Superannuation is a compulsory fund for everyone who has worked and resides in Australia. The balance serves as a retirement fund, and under federal law, employers must make minimum contributions for all employees. Currently, the minimum is 10%, rising to 12% in 2025. Employees can make voluntary contributions by diverting a portion of their income. It is possible to end up with several accounts as employees move from employer to employer. This can result in excessive fees and can be resolved by consolidating all of the supers in your name. 40% of superannuation holders have multiple accounts.
Where Does Your Super Go When You Die?
When someone dies, their superannuation is generally paid to their dependents. Dependents include your spouse (de-facto or same-sex partner), children (including step, adopted, or de facto), a financial dependent (a grandchild who is wholly dependent on the deceased). An interdependent relationship can also be classed as a dependent; this is anyone the deceased had a close relationship with, lived with, and one of the two provided the other with financial and domestic support. This could be a sibling, close friend, or an adult child, etc.
Alternatively, it can be paid to their estate. When superannuation is paid upon someone’s death, it is known as a ‘death benefit’. A death benefit is made up of the superannuation account balance and any insurance benefit if they held death insurance cover. Even if the superannuation account wasn’t large, an insurance payment could increase the death benefit by thousands of dollars. Therefore, it’s important to think about what happens to it upon your death.
Can You Nominate Someone To Receive Your Super?
There are two different nomination types when you choose a beneficiary for your super.
A non-binding nomination is when the superannuation trustee decides who Will receive the death benefit. This payment is entirely at the trustee’s discretion. They may take the financial situations of those involved into consideration.
A binding nomination is when the deceased has nominated a specific person to receive their benefit, which means the trustee must pay it to this person upon their death. It’s important to note that nominations can lapse. A binding nomination expires after three years, every three years, which means you have to stay on top of the nomination process to ensure it aligns with your wishes. A binding nomination is the simplest option to ensure your benefit ends up in the right hands.
You should ensure you have a valid beneficiary to receive your death benefit. If you do not have an eligible dependent or wish to direct it elsewhere, you can request that it be paid to your legal representative to be included in your estate. If you do not make a nomination, it Will be at the behest of the fund’s trustee. The trustee Will be bound by the rules and legislation surrounding superannuation death benefits. Your Will and estate lawyers can help you navigate this to avoid anyone challenging a Will following your death.
If the person you want to nominate is not a valid nomination, you can still opt for the legal representative option. This Will pay your benefit into your estate, which Will be distributed as per the contents of your Will. This is another reason to ensure your Will is kept up-to-date.
When to Seek Legal Help
If you believe you were entitled to a share of your loved one’s superannuation, then you need to seek out the services of deceased estate lawyers. A good lawyer can provide you with sound legal advice on how to proceed and whether you have any right to dispute a Will. You don’t have long to contest this. If you believe you were entitled to the death benefit, you have 28 days to request a review. You Will need documents that support your claim, and these should highlight the close relationship you had with the deceased or proof that you were dependent on them.
You should always update your Will following a major life change, such as divorce. The best way to avoid a Will dispute is to keep yours up to date. At AJB Stevens, we can help you with contesting a Will. Will estate disputes are our specialty, and as your estate litigation lawyers, we can guide you through the Will dispute process.
If you want to contest a Will or request a death benefit review, contact AJB Stevens today to discuss your next steps.