Who gets your super when you die?

When a person dies, in most cases their super provider pays their remaining super to their nominated beneficiary. 

In most cases the money is either paid to any dependants or into their estate.

Money paid after a person’s death is called a super death benefit.

When you sign up to your superannuation provider you can nominate the beneficiary, but whether this is binding or not depends on your provider.

Read more: The top 10 performing super funds of the year

If a binding death benefit nomination is allowed, you can nominate one or more dependants or your legal personal representative to receive your super on your passing.

If a deceased person does not make a nomination, the trustee of the superannuation provider may:

  • use their discretion to decide which dependant or dependants to whom the death benefit is paid
  • make a payment to the deceased’s legal personal representative (executor of the deceased estate) for distribution according to the instructions in the deceased’s will.

Read more: Experts call for end to super concessions

If, on the other hand, a non-binding nomination was made by the deceased, the trustee of the superannuation provider may:

  • use their discretion to pay in accordance with the non-binding nomination
  • make a payment to the deceased’s legal personal representative (executor of the deceased estate) for distribution according to the instructions in the deceased’s will.

Your superannuation provider will be able to provide you with more details on death benefit nominations in your particular situation and whether they are binding or non-binding.

A dependant or dependants of the deceased can have the death benefit paid as either a lump sum or an income stream, however, if the super is left to someone who is not a dependant the money must be paid as a lump sum.

Read more: What to check when you get your super statement

Who is considered a dependant?
For the purposes of receivinga death benefit payment, dependants of the deceased are considered to be the spouse or de facto spouse of the deceased, a child of the deceased (regardless of age) or a person in an interdependency relationship with the deceased.

An interdependency relationship exists between two people if:

  • they have a close personal relationship
  • they live together
  • one or each of them provides the other with financial support and
  • one or each of them provides the other with domestic support and personal care.

If you would like to leave your super to someone who is not a dependant under the super laws, contact your provider about making a binding death benefit nomination to have the payment made to your legal personal representative. This will ensure your super is distributed according to your will.

There are limitations on who can receive a death benefit income stream. Adult children can only receive an income stream if they are under 25 years old and financially dependent on the deceased or have a permanent disability.

Adult children with a permanent disability can continue to receive an income stream after they turn 25 years old, in all other situations the income stream must change to a lump sum on or before the date they turn 25 years old.

You can find out more information on super death benefits from the Australian Taxation Office.

Do you know where your super will go when you die? Have you updated your beneficiaries to reflect your wishes? Why not share your thoughts in the comments section below?

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Written by Ben



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