More people are holding more of their wealth in superannuation.
A common issue flowing through all estate planning now is ensuring that superannuation funds (including the proceeds of life policies held in the superannuation fund), pass to the intended beneficiary.
Most superannuation funds allow you to nominate who is to receive your superannuation if you die.
What you may be surprised to know is that in many cases, your superannuation fund can ignore your nomination and pay the superannuation to another person (being a dependent of yours) or to your estate.
Worst still, if you make no nomination, the superannuation fund will proceed to make its own decision without any guidance from you.
If your superannuation fund is paid to a person (either by your nomination or by your superannuation fund just making its own decision), your Will has no impact on who obtains your superannuation. Remember that even though your balance may not be high, most superannuation policies now have a life insurance policy attached (meaning that your low balance may be quite high when the life insurance is added).
Most superannuation funds now allow "binding" nominations. The benefit of making a "binding" nomination is that the trustee cannot ignore your wishes.
The person who will decide who receives your superannuation (including any life insurance held within your superannuation) will be:
Who makes the decision?
|Superannuation - where you make no nomination.||The trustee of the fund.||This can produce an unsatisfactory result.|
|Superannuation - where you make an (advisory) non-binding nomination.||The trustee of the fund, but with reference ot your nomination.||The trustee can ignore the advisory nomination - this can produce an unsatisfactory result.|
|Superannuation - where you make a binding nomination.||You, through your binding nomination.||You retain absolute control.|
|Life policy - within superannuation||As above, depending on whether or not you have made a binding nomination.||The proceeds form part of the superannuation fund.|
As part of proper estate planning, it is important to ensure that the nomination to your superannuation fund is consistent with your intentions in making your will.
In many instances, a binding death nomination should be made. We can assist you with this.