When preparing your Will, you may be surprised to learn that your superannuation entitlements – both employment contributions and death benefits – will not automatically be dealt with as part of your Will. While superannuation is an asset that is dealt with as part of administering a deceased person’s estate, that asset may only be distributed in accordance with your Will in very specific circumstances.
Your superannuation is likely to be one of the largest assets within your estate and so you may intend for the proceeds of your fund to be used by your spouse to pay out your home mortgage and to provide financial security for your spouse and children. However, this may not necessarily occur if the right steps have not been taken to ensure those intentions are met.
Although you probably filled out a nomination form when you opened your superannuation fund which named your proposed beneficiaries, you should be aware that this initial preference is not usually binding on the superannuation fund’s Trustee. This means that the Trustee has the power to decide how your superannuation is to be divided between your dependants following your death. This situation may be particularly concerning to you if you have children under the age of 18 years or if you live in a blended family situation.
It is therefore important that you receive advice specific to your circumstances to ensure you make an informed choice as to how this valuable asset will be dealt with in the event of your death. Our Estate Planning Team can advise you of the options.