NSW Is Superannuation Part of My Estate?

[snoop]

Hi,

Due a recent experience being an executor of will and currently undergoing treatment for cancer, I am reviewing my estate planning and have a Superannuation question.

I have a Super fund - like everyone does - which also has a Death benefit payable. I have a beneficiary nominated on the account as well, but does the Superannuation form part of my estate? Or is it separate?

I want to leave some detailed instructions for my executor of will who I have absolute trust in, but know they will struggle with the legal side. Do they need to include my Superannuation in the probate process?

I have checked with my Super fund and they have advised it would not be required.

In saying this though, should I tell her to include it anyway just in case? My Super balance including the death benefit is under 150K - as I have invested heavily in the stock market over the years with the intention of these funds plus property investments financing my retirement.

 

[Smiley]

No.

Super is commonly included in the will however superannuation is not an asset therefore anything written in the will is non binding on the trustee of your superannuation fund.

I would strongly suggest to contact your superannuation fund and complete a BINDING nomination. When completing the Binding nomination, either:

1. State your nominated beneficiaries and their relationship to you and percentage. EG Bob Smith 100% as child; Or

2. State your "Legal Personal Representative 100%" as your nominated beneficiary.

Option 1 is generally easier. This binds the trustee to pay the benefit to whom you wish to pay the benefit to. It should be noted that your beneficiary must meet the definition of a "beneficiary" otherwise the binding nomination becomes non-binding which is not good.

Option 2 may be of assistance if the person/s you want to nominate does not fit the definition of beneficiary. Option two directs the Trustee to pay the benefit to your LPR. Your LPR upon receipt of the benefit is required to distribute the money from your superannuation in accordance with the will.

You ask if probate is required?

Depending on the size of your estate and to whom your LPR needs to contact to administer your estate, a Grant of Probate may or may not be required. If required, your LPR will probably need to get a lawyer to help obtain Probate which will cost a few thousand off the top of my head.

You state your LPR is not legally minded.

If the person/s that you wish to nominate as a beneficiary meets the definition of a beneficiary, than option 1 would be easier. This way your LPR does not need to do anything in terms of your super as the super fund will pay your superannuation directly to who you nominated.

What is the definition of a beneficiary?

When you contact your superannuation fund and ask for a copy of the Binding nomination form, read the form very very carefully. The form will tell you the definition of a beneficiary. Again, if the person you want to nominate is does not meet the definition of a beneficiary, than Option 2 would be your best bet.

Hope this helps!

 

[Sophea]

Superannuation death benefits do not automatically form part of your estate and therefore cannot be primarily dealt with in a Will.

As stated above, a death benefit must be paid from the super fund in some form after the death of the account holder. The superannuation fund trustee has absolute discretion as to how that benefit will be paid out to your dependants, unless you provide a valid binding nomination.