Making sure your loved ones receive your super

It is not well known that your superannuation does not make up part of your estate and therefore is not covered by your will.   As such it is necessary to address Superannuation separately when it comes to estate planning.

The trustee of a Superannuation fund is duty-bound to act in the deceased’s best interest in the event that one of their members passes away. This usually involves the trustee assessing the needs of potential beneficiaries and using their discretion to make a decision.

Often the Trustees will simply distribute the superannuation proceeds directly to the estate, it is also common to distribute directly to the spouse. However over the last decade or so I have heard many stories where the trustee has made a somewhat strange determination.

The best method to ensure that your Superannuation is distributed to the person you would like is through the use of death benefit nominations. There are 2 types, binding and non-binding. A non-binding nomination is nothing more than a guide to the trustee on where you would like your superannuation to be distributed where as a valid binding nomination must be followed by the trustee and as the name suggests is binding.

I’ve been asked on many occasions under what circumstances you would use a non-binding nomination, and although I’m sure they serve a purpose, I always advise to use a binding nomination.

A binding nomination must be noted as such and signed by 2 witnesses, most need to be updated periodically with 3 years being the usual term. 

There are some potentially complex issues surrounding the taxation of a Superannuation death benefit, and not all potential beneficiaries receive the same tax treatment. It is prudent to receive financial advice in relation to the estate planning of superannuation as there a numerous factors that influence how the payment is received by the end beneficiary as well as the associated tax, and structuring it correctly can make a significant difference.

It is possible to have the Superannuation assets form part of the estate and be distributed in accordance of the will. In this case you nominate your legal representative to be your beneficiary. This may allow the executor to distribute the Superannuation assets more tax effectively or simply make it easier for the executor to distribute all assets as per the will.


I would highly recommend everyone speak to their financial advisor about how their superannuation will be distributed when they pass away.

Author; Alex McKenzie Categories: Future Financial Services Blog

About the Author

Alex McKenzie

Alex McKenzie

Owner at Future Financial Services


  • Paraplanner at Zammit Partners Investments
  • Unit Trust Administrator at Colonial First State


  • University of Western Sydney
  • Penrith High


As a Financial Planner I help people to achieve what they would like in life. This involves helping you to identify the things in life they would like , developing plans to help achieve them and strategies to protect what you already have. We do this by providing Financial Advice to guide you through your life stages.

The financial planning process involves determining a clients current situation and financial objectives and tailoring strategies to assist in best achieving those objectives.

I am an expert in superannuation, investments and insurance, these are tools we use to help you achieve your goals.

I aim to use my knowledge of superannuation, taxation and Centrelink to efficiently use your assets and income to achieve your financial goals.

Retirement and pre-retirement planning, wealth creation, asset protection, insurance planning and estate planning are all areas of advice that I provide.

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