When we think about estate planning, most people immediately think of a will. But did you know your superannuation doesn’t automatically form part of your estate? Unless you’ve made the right arrangements, your super — often one of your biggest assets — might not go to the people you expect.
Why Estate Planning Matters
A will sets out how you want your assets distributed when you pass away. Without one, the law decides who gets what, and that may not reflect your wishes. A clear estate plan can:
- Protect your family financially,
- Avoid disputes, and
- Make sure the process is as smooth as possible for loved ones during a difficult time.
Superannuation Isn’t Automatically Covered
Here’s the catch: superannuation is held in trust by your super fund, so it doesn’t automatically pass through your will. Instead, the fund’s trustee decides where it goes — unless you’ve made a nomination.
Binding vs Non-Binding Nominations
There are two main types of nominations you can make with your super fund:
- Non-binding nomination – This tells the trustee who you’d like your super to go to, but the trustee makes the final decision. They’ll consider your nomination, but they’re not required to follow it. This can sometimes lead to delays or outcomes different to what you intended.
- Binding nomination – This is a legally enforceable direction to the trustee about who should receive your super (and any insurance attached to it). As long as the nomination is valid, the trustee must follow it. Many funds require binding nominations to be updated every three years to remain valid.
A Note on SMSFs
If you have a self-managed super fund (SMSF), it’s even more important to have clear and valid nominations. In an SMSF, the trustee has significant control over where your super goes. Without a binding nomination, there’s a real risk your money may not be distributed as you intended.
Bringing It Together
Estate planning and super nominations go hand in hand. Having both in place ensures:
- All your assets are covered, not just those in your estate,
- Your money goes exactly where you want it, and
- Your family is protected from unnecessary stress and disputes.
How We Can Help
Planning ahead isn’t always easy to think about, but it makes a huge difference for those you leave behind. We can work with you (and your solicitor where needed) to make sure your estate plan and super nominations are properly aligned with your wishes.
Bottom line: A will alone isn’t enough. To make sure your super and your estate go to the right people, you need both an estate plan and the right type of super nomination.
Want peace of mind that your money will end up where you want it? Talk to us today about reviewing your estate plan and superannuation arrangements.
