Many Australians have Superannuation which is held with a Super Fund. In fact, for many people their Super is one of the largest cash assets they hold. When making a Will you go through the process of dealing with and distributing your assets, but sometimes Superannuation is overlooked.
This is due to the mistaken belief that Super is owned by the Will maker and will be distributed along with the rest of their Estate. But in fact, Superannuation is not owned by you personally - it is held on Trust by the Trustee of your Superannuation Fund to distribute to you at a specific time.
Because Super is not a simple asset like money in a bank account, there are specific things you need to do to ensure your beneficiaries receive your Superannuation as part of your Estate.
Why can't I leave Superannuation in my Will?
Your Will is a legal document that deals with and distributes assets that you own. Due to the way in which Superannuation schemes are set up the money in your Superannuation Account is not owned by you. It is owned by the person who holds it on Trust on your behalf. Of course, this does not mean that the Trustee can simply do as they like with this money; there is legislation in place to protect your Super.
Your Superannuation balance is held on Trust and can be distributed according to your wishes, but you cannot allocate your Superannuation in your Will alone.
When looking to leave your Superannuation to a beneficiary it is important to prepare a binding nomination with your Superannuation provider.
Superannuation does not automatically form part of your Estate and you need to ensure that you contact your Super Fund with information about your beneficiary or Estate.
Nominating a beneficiary of your Superannuation
You can nominate a beneficiary with a Binding Nomination. This stipulates that your Superannuation Fund is required to pay your benefit to the beneficiaries nominated. A Binding Nomination allows you to nominate whomever you want to receive your Superannuation - including a Legal Representative. If your Superannuation is left to your Legal Representative then any balance in your Super can be distributed in accordance with your Will.
A Binding Nomination with your Super Fund allows you to nominate any person you wish to receive your Super balance upon your death.
If you leave your Super to your Legal Representative then the balance will be managed along with your Will, in which case it is important to include a Superannuation Will Clause in your Will.
You can contact your Superannuation Fund to get the information you need to prepare a Binding Nomination.
Making a Binding Nomination with your Super Fund
You can make a Binding Nomination at any time with your Superannuation Fund. You simply need to provide the details of your chosen beneficiary to your Superannuation Fund. A Binding Nomination usually remains current for three years from the date it was last signed, amended or confirmed.
Binding Nominations do not take effect until they are received and accepted by the Trustee of your Super Fund.
Once you have made a Binding Nomination your Super Fund will pay your balance in accordance with the Binding Nomination upon your death.
To ensure your wishes are followed it is important that you update your Binding Nomination if your circumstances change, or if it has been over three years since you last provided beneficiary information to your Superannuation Fund.
Managing your Superannuation with a Will Clause
While you cannot specifically distribute your Superannuation through your Will you can choose to leave your Superannuation to your Legal Representative which means that your Superannuation will be paid to your Estate. In this case you can indicate your wishes by including a Superannuation Will Clause in your Will.
A Superannuation Will Clause provides information on how you wish to distribute your Superannuation upon your death.
You should ensure that any Binding Nominations are current and align with your Will to avoid any confusion.
The fastest and most effective way to ensure the correct allocation of your Superannuation Funds is with a Binding Nomination. A Superannuation Will Clause provides further confirmation and peace of mind that your wishes will be followed.
Ensure your Super is distributed according to your wishes
You can ensure that your Superannuation is distributed according to your wishes by notifying your Superannuation Fund with your Binding Nomination and by inserting a Superannuation Will Clause in your Will.
Rose Lawyers are experienced in working with Wills and Estates and can ensure your peace of mind with comprehensive legal advice and guidance.