Payments generated upon death from superannuation funds are not typically assets of a deceased person’s estate. They sit separate and apart and are dealt with by the trustee of the superannuation fund in accordance with the powers enjoyed by the trustee under the trust deed and at law.
Don’t fall into the trap of assuming that a will is sufficient to deal with their superannuation assets. Not all property can be dealt with by a will.
Superannuation payments can become part of your estate (and, therefore, within the ambit of your Will) but only if:
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- The deceased superannuation fund member had executed a valid Binding Death Benefit Nomination which pays the superannuation funds to the estate; or
- The trustee of the superannuation fund in the exercise of the trustee’s discretion pays the superannuation funds to the estate. In many instances, it appears that trustees, in exercising their discretion, automatically pay all entitlements to the spouse or domestic partner of the deceased (as opposed to the children of the deceased) and have been known to do so as a matter of policy notwithstanding the actual circumstances of the relationship.
It is essential that you constantly monitor your Superannuation Binding Death Benefit Nominations to ensure they are always valid and reflect your intentions. Keep in mind that some funds will have a automatic lapse period on Binding Death Benefit Nominations and you should diarisesuch dates. You should also liaise with your fund manager or superannuation advisor to ensure that you understand your position.
Similarly, entitlements under various provisions of life insurance policies can be subject to you nominating to whom payments are to be made upon your death and such assets do not always form part of your estate and cannot, therefore, be gifted through your will. That is, they can be assets that sit outside the operation of your will. It is important that you discuss the operation of such matters with your insurance broker or agent to ensure that, upon your death, such payment go where you wish them to go.
As such, it is essential that you understand the mechanics of any such asset, how your nomination is to be exercised and then ensure that you complete such nominations in strict accordance with the rules of that institution, policy etc having regard always to their particular time frames and other requirements. Failure to do so can disadvantage parties that you had intended or expected to benefit financially upon your death.
ASAP Lawyers can assist your with your estate planning matters. Contact us on 03 9450 9400 to speak with a member of our team. Our lawyers are able to:
- Review and update your current will;
- Draft you a new will; and
- Advise you on your binding death nomination.