Superannuation after Death
How is Superannuation handled after you pass away?
On your death superannuation is not an asset that you own in the way that you own your house or motor vehicle. Superannuation is actually owned by the Trustee of the Superannuation Fund of which you are a Member and the Fund will set out how your entitlement as a member of that Fund is to be treated on your death i.e. who gets it.
Binding Death Benefit Nominations and/or Nomination of Beneficiary
It is critical for every person who is a Member of a Superannuation Fund to contact the Trustee of the Super Fund and to complete a Nomination of Beneficiary or a Binding Death Benefit Nomination.
The preference is to make it a Binding Death Benefit Nomination which basically means that the Trustee has no alternate other than to pay it in accordance with that Binding Death Benefit Nomination.
If you do a Nomination of Beneficiary Form that is not binding and the Trustee still has a discretion to determine the people who are dependents and who should receive your entitlement in the Super Fund.
Who should I nominate?
Because of the Taxation Rules it is far better to nominate your spouse as your Beneficiary.
The spouse receives the entitlement in the Super Fund at the best tax rates. Every other person receives any benefit from a Fund at a higher tax rate.
