What happens to your super if you die?

Superannuation is an excellent way to invest for your retirement. The Australian government has provided some great tax concessions, which make super one of the best long term investment vehicles. Your savings grow because money is paid in regularly, which your super fund invests at low rates of tax. But what happens to your super if you die?

Dependants
If you die while still a super fund member, the super company must normally pay your death benefit to one or more of your dependants or your estate.

'Dependants' could include your spouse, children, people with whom you had an 'interdependent' relationship or those who depend on you financially. We recommend that you ask your super fund for more details. If the super is paid to people who are not your dependants, it may be taxed.

Nominations
Most super funds let you nominate who you want your death benefit paid to, either as a 'non-binding' or 'binding' nomination.

A 'non-binding nomination' just guides the trustee, who still has the final say, especially if you have dependants, but you nominate someone who does not depend on you. The trustee is not required to follow the instructions in your will.

A 'binding nomination' will bind the trustee, and lets you name:

• a dependant, or
• your 'legal personal representative', who must distribute your benefit according to your will or according to law if you have no will.

Make sure that you keep these nominations up to date, for example, if you marry, re-marry or have children.

For more information about superannuation, speak to one of our financial planners at Intellichoice on + 61 7 3624 1900.