I Own My Super… Don’t I?

One of the biggest misunderstandings in estate planning is the belief that your superannuation automatically forms part of your estate and can be gifted in your Will, like the family home or your prized Harley Davidson.

Unfortunately, super doesn’t always work that way.

Many people confidently write clauses in their Will saying things like, “I leave my superannuation equally to my children,” believing the job is done. Meanwhile, the super fund is quietly sitting in the corner saying, “That’s adorable, but we’ll decide according to the rules.”

In most cases, your superannuation balance is held by the trustee of the super fund, not by you personally. This means that the trustee generally decides who receives the benefit unless you have a valid binding death benefit nomination in place.

Many people also assume that their superannuation can be left to anyone they choose. Unfortunately, superannuation law has something to say about that as well. While you can make a nomination, and it is a very good idea to do so, the person you nominate must be a superannuation dependant (e.g. a partner, child or financial dependant or interdependant) or your estate.

Without proper planning, your super may not land where you intend. The result can range from confusion and delays to full-scale family drama.

The good news is that with proper advice and the right documentation, your super can usually be directed according to your wishes. The key is understanding that your Will and your superannuation are related, but they are not the same thing.