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Why is Superannuation important?

Superannuation is one of the most overlooked facets of estate planning, as many individuals do not give it much consideration until they reach retirement age and can access their balance. Making plans for the direction of your superannuation is incredibly important, as there is often a considerable sum of money contained within your superannuation account, which sometimes also includes life insurance.

Contrary to common belief, your superannuation entitlement does not automatically form part of your estate when you pass away. Instead,  a direction is made by the trustee of the superannuation fund to pay your superannuation death benefit to one or several of a limited class of beneficiaries including: your spouse, your financial interdependent, your children or financial dependents, or to your  estate. Unless a binding death nomination is prepared and is current at the time of your death, the trustee of your superannuation will pay the superannuation at its discretion. 

Whether tax is payable on your superannuation death benefit will depend on who it is paid to. We can assist you in providing advice on the expected tax effect of the payment of your superannuation death benefit, depending on where it may fall. 

As your superannuation does not automatically form part of your estate, you should consider:

  1.   where you wish for it to be paid;
  2.   whether you wish to bind your trustee;
  3.   whether you wish for the funds to be protected, for example in a Testamentary Trust; and
  4.   whether your superannuation is held via a self-managed superannuation fund.

We can advise you on the appropriate course depending on your family circumstances and the expected tax that may be payable.  We are happy to work with your accountant and financial advisors to achieve your goals.