The Secret to a Perfect Super Death Nomination Is Easier Than You Think
Did you know your superannuation might not automatically go to who you think when you pass away? Many Australians assume their Will covers everything, but that’s not always the case. In this post, you’ll learn how your super, pension, and Will actually work together, and the simple secret to making sure your super ends up exactly where you want it to go.
When most people think about their estate, they imagine their Will taking care of everything — the house, the bank accounts, the savings, even the super. But here’s the thing: your superannuation doesn’t automatically form part of your estate.
I often see clients shocked when they realise that their super fund — not their Will — decides where their money goes after they pass away. If there’s no valid death benefit nomination in place, the fund trustee gets the final say. And that’s where things can go wrong.
Let’s talk about how you can avoid that.
What happens to your super when you die?
Your superannuation balance (and any life insurance attached to it) doesn’t automatically go to your estate. The super fund holds it in trust until it decides who gets it. This means your money could go to someone you didn’t intend — like an ex-partner or estranged family member — simply because the right paperwork wasn’t done.
Binding vs. Non-binding nominations
The key to controlling your super after death is a death benefit nomination.
A binding nomination tells your fund exactly who to pay. It’s legally enforceable as long as it’s valid and up to date (most expire after three years unless you have a “non-lapsing” one).
A non-binding nomination, on the other hand, is just a suggestion. The trustee can still override it.
So, the “secret” to the perfect super death nomination? Make it binding, current, and aligned with your Will.
How super, pensions, and Wills work together
Your super and pension are separate from your Will — but they can work hand in hand. The goal is to make sure everything flows smoothly and consistently.
If you nominate your estate as the beneficiary of your super, the money will go into your estate and be distributed under your Will. That’s great if you have a solid estate plan in place.
But if you want the funds to go directly to a spouse, child, or dependent (without going through probate), you can name them directly on your super form.
The trick is to get advice that ties all three together — your super, your pension, and your Will — so there’s no confusion, tax issue, or dispute later.
Common mistakes people make
I see people make the same few mistakes over and over again:
Forgetting to update their nomination after a divorce or new relationship.
Not realising their nomination has expired.
Assuming their Will covers their super (it doesn’t, unless nominated properly).
Naming someone who doesn’t qualify under super law.
Not getting tax advice as to minimize your tax liabilities to you or your beneficiaries.
These small oversights can cause big headaches — or worse, legal battles among family members.
The easy fix
The good news? Sorting it out is easier than you think.
All you need is:
A valid and up-to-date binding death nomination.
A Will that complements your nomination.
Professional advice to make sure everything fits together.
Once you’ve done that, you’ll have peace of mind knowing your money will go exactly where you want — no surprises, no delays, and no drama.
You could also include an equalisation clause in your Will, properly drafted by a lawyer to equalize distributions from your estate to take into account any distributions that your Super may have made so that yu achieve the same overall outcome with the sharing of your estate amongst your beneficiaries.
It only takes a small amount of planning to prevent big problems later. Make sure your Will, super, and pension all work together. If you’re unsure where to start, reach out to us at HazeLegal — we’ll make the process clear and stress-free.
DISCLAIMER
This commentary is published by HazeLegal for general information only—it’s not legal advice. If you have questions or need advice for your specific situation, we recommend speaking to a lawyer or reaching out to us at http://hazelegal.com.au before making any decisions.
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