Superannuation and Your Will: Who Receives Your Super When You Die?

Who can receive your super?

• Your dependants under super law: your spouse or de facto partner, your children of any age, anyone financially dependent on you, and anyone in an interdependency relationship with you.
• Your estate (your “legal personal representative”), in which case it is paid under your Will.

A nomination in favour of someone outside these groups, such as a brother or sister, is not valid.

Types of nomination

• Binding nomination: the trustee must follow it if it is valid. Many lapse after three years unless renewed; some funds allow non-lapsing nominations.
• Non-binding nomination: a guide only; the trustee decides.
• Reversionary pension: an income stream continues to a nominated beneficiary.
• Self-managed super funds: what happens depends on the fund’s trust deed and who controls the fund after your death.

Tax on death benefits

Lump sums paid to a “tax dependant” (a spouse, a child under 18, a financial dependant or someone in an interdependency relationship) are generally tax-free. Adult children who are not financially dependent usually pay tax on the taxable component: up to 15% plus the Medicare levy, and more where the fund has an untaxed element. Paid through the estate, the Medicare levy does not apply, but the money then forms part of the estate and can be claimed by creditors or in a family provision claim.

Common problems we see

• Nominations that lapsed years ago.
• A nomination that contradicts the Will, especially in blended families.
• Insurance inside super that is worth more than the account balance and was never considered.
• Beneficiaries overseas who need help claiming and dealing with Australian tax.

We review your super nominations as part of every estate plan, and act for families claiming death benefits.

Related guides

• Letters of administration (no Will)
• Estate planning: Will, power of attorney, medical decisions
• Testamentary trusts
• Executor problems and disputes
• Checklist: the first 30 days after a death
• Do I need probate? 2-minute check
• Professional executor & trustee services
• Wills & estates fees

General information only, not legal advice. It is based on Victorian law unless stated otherwise; the rules in other states and territories differ. Your circumstances should be assessed individually.