What Happens To My Super If I Die?
Have you ever thought to yourself, 'What happens to my super if I die?'. You wouldn't want all that money to go to waste, and of course you would want your loved ones to be able to use it. It might not be something nice to think about, but it is all part of looking after your loved ones.
If the worst were to happen, your superannuation will be paid to your nominated beneficiary. The amount is usually your total superannuation plus any death cover benefits which may be included in your super plan.
Who Is My Beneficiary?
Your beneficiary is nominated by you, by completing the death benefit nomination form for your super product.
Keep in mind that there are 3 types of nominations.
One is 'No Nomination' which is when you do not nominate any beneficiary on your super, in this case, the trustee may use its judgement to determine the beneficiaries. i.e. they will decide who receives the funds, or your death benefit will simply be paid to your estate.
The second type is a 'Non-Binding Nomination', this is where you have nominated your preferred beneficiaries, but not binded these nominations. In this case the trustee of the super fund is not obligated to pay the benefit to your preferred beneficiary. The trustee will decide who your benefit will be paid to.
The third type is 'Binding Nomination', this is where you nominate the beneficiaries and state how much of your super and death benefit each beneficiary will get.
A beneficiary must be your estate, or must be a dependant under superannuation law.
You can always change your nominated beneficiaries at any time, by completing a death benefit nomination form for your super product.
Will The Benefits Be Taxed?
If your beneficiary is a child of yours who is under 18, your spouse, ex-spouse or any other dependant, there will be no tax on the lump sum superannuation benefit paid to them.
If the lump sum payment is paid to any other person, it will be taxed up to a maximum of 31.5%
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