The Key Thing Most People Don't Know
Your will doesn't automatically control your super. Super is held in a trust, so when you die, the trustee of your super fund decides who receives the benefit — unless you've made a valid binding death benefit nomination (BDBN).
Types of Nominations
| Type | Binding? | Expires? |
|---|---|---|
| Binding nomination | Yes — trustee must follow it | Every 3 years (most funds) |
| Non-binding nomination | No — trustee considers it but can override | No expiry |
| Non-lapsing binding | Yes — trustee must follow it | Never (some funds offer this) |
| Reversionary beneficiary (pension) | Yes — pension continues to nominated person | Set when pension starts |
Who Can Receive Super Death Benefits
Only certain people are eligible to receive your super directly:
- Your spouse (including de facto)
- Your children (any age)
- Anyone in an interdependency relationship with you
- Anyone who was financially dependent on you
- Your legal personal representative (your estate)
Tax on Death Benefits
Tax depends on who receives the benefit and how. Tax-free to a spouse or dependent child. Non-dependants (e.g., adult children) may pay up to 17% on the taxable component (including Medicare levy).
Frequently Asked Questions
Does my will cover my super?
No. Super is held in a separate trust. You need a binding death benefit nomination with your super fund. Your will only covers super if you nominate your estate (legal personal representative).
How do I set up a binding nomination?
Contact your super fund and request a binding death benefit nomination form. Fill it out, have it witnessed by two adults, and return it to your fund. Check if it needs to be renewed every 3 years.
What if I don't have a nomination?
Your super fund's trustee will decide who receives the benefit, considering your dependants and any non-binding nominations. This can lead to disputes and delays.