Legal Comment by Mark Illidge of Hinterland Lawyers

August 2007

It is prudent to regularly review your superannuation rights and entitlements as part of your ongoing estate planning.  The death benefit payment from a super fund might be the largest asset you need to consider when preparing an estate plan.

Generally the will maker has little or no control over who will receive the benefit of a superannuation fund.  However, most superannuation trust deeds entitle a member to nominate a beneficiary.  It is not uncommon to find that will makers cannot recall whether or not they have nominated a beneficiary.  If there is no nominated beneficiary then you should rectify this, and review your nomination on a regular basis.

The trustees of some superannuation funds may disregard the nomination by the member, but where this occurs the trustees usually resolve to pay the funds to the members estate.  Therefore it is preferable to nominate the beneficiary to the trustees of the superannuation fund, as well as ensuring that your will contains an express provision that the nominated beneficiary is to receive the superannuation monies.  However when trustees of superannuation funds disregard the nomination of a member and pay the funds to the estate, litigation often arises.  This is because the estate now includes an asset that may be attacked under a Family Provision Application or family law property settlement commenced prior to the death of the member. 

It is possible to circumvent this problem in self-managed superannuation funds and some industry funds.  The trust deed can entitle a member to make a binding nomination of the beneficiary of the superannuation monies payable in the event of the member's death.  So to make life simpler for the intended beneficiary/ies of your entire estate it is important to follow this issue through with your super fund.

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