Does Your Super Form Part of Your Will?
Superannuation generally does not automatically form part of your estate or your Will. Instead, it's paid according to a valid Death Benefit Nomination, or at the trustee's discretion if no valid nomination exists, which means your Will has no effect on how your super is distributed unless you've specifically nominated your estate as the recipient.
Why doesn't super automatically form part of my estate?
Superannuation is held in trust by the fund, not owned by you personally in the way other assets are, so it sits outside your estate by default. This is a common point of confusion, and it means updating your Will alone does nothing to change who receives your super.
What is a Death Benefit Nomination?
A Death Benefit Nomination is a document that records who you want to receive your superannuation when you die. It's a separate instruction from your Will, and needs to be made directly with your super fund, not through your solicitor or estate planning documents alone.
What's the difference between a binding and non-binding nomination?
A valid, current binding nomination compels the trustee to pay your death benefit exactly as directed, provided it's made out to an eligible beneficiary. A non-binding nomination is guidance only, the trustee retains discretion over the final decision, taking your wishes into account alongside the circumstances at the time.
Can I direct my super to my estate through my Will?
Yes, but only if you've made a valid nomination directing your death benefit to your Legal Personal Representative, which then allows the benefit to be distributed according to your Will. Without that specific nomination, your Will has no bearing on where your super goes.
Who can receive a death benefit directly?
Superannuation law restricts direct death benefit recipients to dependants, such as a spouse, children, or someone in an interdependency relationship with you, or your Legal Personal Representative for distribution through your estate.
How often should a Death Benefit Nomination be reviewed?
At least annually, and whenever your circumstances change, such as marriage, separation, the birth of a child, or a person named in the nomination passing away. A nomination naming a former partner can remain valid if it's never updated.
Frequently asked questions
If I update my Will, does that automatically update where my super goes?
No, your Will and your Death Benefit Nomination are entirely separate. Updating one has no effect on the other, both need to be reviewed and updated independently.
Does a binding nomination expire?
Many binding nominations need to be renewed every three years to remain valid, though this depends on the fund's rules, an SMSF's Trust Deed can specify different requirements, including non-lapsing nominations that don't expire.
What happens if I don't make a Death Benefit Nomination at all?
Without a valid nomination, the trustee decides how to distribute the benefit at their discretion, guided by the Trust Deed and considering your dependants and estate, rather than following a specific instruction from you.
Not sure whether your Death Benefit Nomination and your Will are working together properly? Contact Lifetime SMSF on 1300 031 943 or visit lifetimesmsf.com.au.
This information is general and factual in nature. It is not financial product advice, legal advice or tax advice. Lifetime SMSF Pty Ltd is not licensed to provide financial product advice under the Corporations Act 2001. If you require personal advice, consult an appropriately licensed or authorised financial adviser.