What happens to your super if you die?
Your super could be one of your biggest financial assets. But unlike many other assets (if you’re lucky enough to be a homeowner, for examples) it usually isn’t automatically covered by your will.
Suppose the worst happened and you didn’t make it to retirement age. You’d probably want your super to go to the person or people you choose. Which means you need to make a beneficiary nomination with your super fund. Future Super offers two kinds, which we’ll cover below because there’s a crucial difference between them.
Keeping your beneficiaries up to date is one of those small jobs that’s easy to put off. But once it’s done, you’ll have more confidence that your super – and any eligible insurance benefit – will be directed according to your wishes.
Who gets your super if you die?
When you die, your super account balance is paid as a death benefit.
This may include:
the money in your super account
any eligible insurance benefit attached to your account
any other amount the fund needs to pay (such as interest added under the fund’s rules)
Your super doesn’t automatically form part of your estate or get distributed according to your will. Instead, the Trustee of your super fund is responsible for deciding who receives it… unless you have a valid binding beneficiary nomination in place.
Who can receive your super
Superannuation law limits who can receive a super death benefit. Depending on your circumstances, eligible beneficiaries may include:
your spouse or de facto partner
your children, including stepchildren
someone who was financially dependent on you
someone you shared an interdependent relationship with
your legal personal representative, which generally means your estate
If you nominate your legal personal representative, your super will generally be paid to your estate and distributed according to your will.
A parent, friend or charity can’t usually receive your super directly unless they qualify under the relevant superannuation rules or your benefit is paid to your estate.
Why nominating a beneficiary is important
If you don’t make a nomination (or your nomination is no longer valid) the Trustee will decide who receives your super.
The Trustee must follow superannuation law and consider the circumstances of your dependants. But the outcome may not be what you expected, particularly if your family or relationship circumstances have changed.
Nominating a beneficiary can help give your loved ones more certainty and may reduce delays and complexity during an already difficult time.
It’s especially worth checking your nomination after a major life change, such as:
getting married or entering a de facto relationship
separating, divorcing or changing partners
having or adopting a child
losing a nominated beneficiary
changing your will
experiencing a change in who depends on you financially
Types of beneficiary nominations
Future Super offers two types of beneficiary nominations to super members, and it’s important to understand the difference.
Non-binding nomination
A non-binding nomination tells the Trustee who you would like to receive your super.
The Trustee must consider your nomination, but isn’t legally required to follow it. The Trustee will make the final decision based on your circumstances and superannuation law.
Binding nomination
A binding nomination is a legally binding instruction that tells the Trustee who should receive your super.
If it’s valid and remains in force, the Trustee must follow it. Binding nominations have strict requirements, so it’s important to complete the form carefully.
For example, you need to sign the form in front of two witnesses, who must also sign it on the same day.
A Binding Non-Lapsing Nomination can remain in place until you amend or revoke it, but it’s still important to review it regularly… especially after a significant life.
How to nominate a beneficiary with Future Super
You can nominate a beneficiary by completing the relevant form:
Decide who you would like to receive your super.
Check that they meet the definition of an eligible beneficiary.
Choose whether you want to make a binding or non-binding nomination.
Complete the relevant Future Super form.
If you’re making a binding nomination, sign it in front of two witnesses and make sure all signatures and dates are completed correctly.
Send the form to Future Super using the instructions on the form.
Both forms live on our Documents and Forms page.
You can also check your current nomination through your Member Portal. If you’re unsure whether your nomination is valid or up to date, contact the Future Super team.
Don’t forget your will, though
Your beneficiary nomination and your will work together, but they aren’t the same thing.
Your beneficiary nomination deals with your super. Your will generally deals with assets that form part of your estate, like property, savings, personal belongings and other assets.
If you nominate your legal personal representative, your will becomes especially important because your super will generally be paid to your estate.
Keeping both documents up to date can help make your wishes clearer and make things easier for the people handling your affairs.
A small step towards being Future Ready
Your super is an investment in your future. For Future Super members, it’s also invested in industries and opportunities helping build the world of tomorrow.
Being Future Ready isn’t only about growing your balance. It’s also about making sure your super is set up to support the people and future you care about.
Take a few minutes to check your beneficiary nomination today.
Beneficiaries - FAQs
Does my beneficiary nomination also cover my life insurance through super?
If you have eligible Death cover through Future Super, an approved insurance benefit can form part of the death benefit paid alongside your super balance. Your beneficiary nomination helps determine who receives that death benefit. So, the same beneficiaries are covered by both claims.
The insurance claim itself is assessed separately, so an insurance benefit is only included if the claim is approved under the terms of your cover.
Can I nominate more than one beneficiary?
You can nominate more than one eligible beneficiary to receive your super death benefit. You’ll need to specify how you want the benefit divided between them when completing your nomination. The people you nominate must also be eligible to receive your super under superannuation law, such as your spouse, children, certain dependants or your legal personal representative. Download ATO guide.
What happens if one of my nominated beneficiaries dies before me?
If someone you’ve nominated dies before you, you should review and update your beneficiary nomination. A binding nomination only directs the Trustee where it remains valid and can lawfully be followed, so changes involving a nominated beneficiary can affect what happens to your death benefit. Regularly checking your nomination – particularly after a death or other major change in your family circumstances – can help make sure it still reflects your wishes.
All information is general in nature and does not take account of your personal objectives, financial situation or needs. Before deciding whether a particular product is appropriate for you, please read the relevant Product Disclosure Statement including any incorporated information, Target Market Determination and Financial Services Guide available at futuresuper.com.au, and consider speaking with a financial adviser.
Published by Future Super Services Pty Ltd ABN 88 652 577 930 AFS Representative No. 001312077, which is a Corporate Authorised Representative of Future Group Financial Services Pty Ltd ABN 90 167 800 580 AFSL 482684, as the Promoter of the Future Super product in the Smart Future Trust ABN 68 964 712 340 (the Fund). The trustee of the Fund is Equity Trustees Superannuation Limited ABN 50 055 641 757 AFSL 229757 RSE Licence L0001458.