Your superannuation does not form part of your estate and does not follow your Will unless you specifically direct it to. When you die, your super fund pays your benefits according to a binding death benefit nomination if one is in place, or at the fund's discretion if one is not. This means without the right documentation in place, your superannuation may not go to the people you intend.

The misunderstanding that catches families completely off guard

Your superannuation does not automatically form part of your estate. It does not automatically follow your Will. It does not automatically go to the people you have named in your Will. It sits entirely outside that document, governed by its own rules, directed by its own paperwork unless you complete a Binding Death Benefit Nomination to draw it into your estate (and refresh it every three years in most cases).

If you have never set up a binding death benefit nomination, or if yours has lapsed, your superannuation fund has the discretion to decide where your super goes when you die. The fund. Not you. Not your Will. The fund.

What a binding death benefit nomination is and why it matters

A binding death benefit nomination is a legal direction to your superannuation fund telling them exactly where to pay your benefits when you die. When it is valid, the fund must follow it. When it does not exist, or when it has lapsed, the fund has discretion over where the money goes. Some binding death benefit nominations lapse every three years and must be renewed. Others are non-lapsing and remain in place until you change or revoke them.

Who you can nominate is also restricted by law. You can generally nominate a current spouse, your children, a financial dependant, someone in an interdependent relationship with you, or your legal personal representative (i.e. your Estate so that the proceeds can be dealt with under your Will). Parents, siblings, and friends cannot be nominated directly unless they meet one of those categories.

How this plays out in real families

I have seen this create real heartbreak for families. A spouse who assumed the super was coming to them, only to find it was paid differently to what was expected.

A nomination made years earlier, when life looked completely different, that nobody had ever thought to update. Superannuation is often one of the largest assets a person holds. For many families it is the largest, particularly when life insurance held inside super is included.

The strategic layer most people miss

Depending on your family structure, directing your superannuation to your estate rather than to individuals directly can open up significant tax and asset protection benefits.

Where a testamentary discretionary trust is part of your estate plan, a superannuation proceeds trust can be established inside your Will to receive those super benefits in a way that preserves tax-free treatment for eligible beneficiaries. This is general information only and the right approach always requires tailored advice.

What to do right now

Contact your superannuation fund today and ask:

Do I have a binding death benefit nomination in place?

Is it lapsing or non-lapsing?

If you do not have one, or if yours has expired, take steps to put one in place.

Then, if you want to understand how your superannuation fits into the bigger picture of your estate plan, that is the conversation we have in a Family Wealth Planning Session.

✦ Book a Family Wealth Planning Session

Frequently Asked Questions

Does superannuation go through my Will in Australia?

No. Superannuation sits outside your estate and is not governed by your Will unless you complete a Binding Death Benefit Nomination directing it to be paid to your estate. It is paid according to a binding death benefit nomination or at the fund's discretion if no valid nomination exists.

What is a binding death benefit nomination?

It is a legal instruction to your superannuation fund directing them where to pay your super benefits when you die. When valid, the fund must follow it.

How long does a binding death benefit nomination last?

It depends on the type. A lapsing nomination expires after three years. A non-lapsing nomination remains in force until you change or revoke it. Check with your fund which type you have.

Who can I nominate in my super?

Generally, you can nominate a current spouse, your children, a financial dependant, someone in an interdependent relationship with you, or your legal personal representative.

Parents, siblings, and friends cannot be nominated unless they meet one of those categories.

What is a superannuation proceeds trust?

It is a special type of testamentary trust established inside your Will to receive superannuation benefits in a way that can preserve tax-free treatment for eligible beneficiaries. It is particularly useful where a testamentary discretionary trust is already part of your estate plan.

This content contains general information only. It is not legal advice. Your situation may differ and this is where tailored advice matters.