why superannuation death benefits matter in your estate plan

Why Superannuation Death Benefits Matter in Your Estate Plan: A Crucial Piece of the Puzzle

Superannuation
why superannuation death benefits matter in your estate plan

When most Australians think about estate planning, they picture a Will, and perhaps one or more delegations or directives such as powers of attorney.

But there’s one powerful piece of the financial puzzle that often gets overlooked: your ‘superannuation death benefits’.

As the superannuation balances of Australians continue to grow—thanks to compulsory employer contributions, voluntary salary sacrificing, and market growth—it’s never been more important to understand how your super fits into your broader estate planning strategy.

understanding the exclusion of superannuation from deceased estates

Understanding the Exclusion of Superannuation from Deceased Estates

Superannuation
understanding the exclusion of superannuation from deceased estates

As we approach our golden years, it becomes increasingly crucial to ensure our hard-earned assets are protected and distributed according to our wishes after we pass away.

Estate planning plays a pivotal role in achieving this, and it’s essential to understand why superannuation does not automatically form part of a deceased estate in Australia.

In this article, we’ll delve into the reasons behind this exclusion, provide practical advice, and empower you to take charge of your estate planning.

separation divorce and superannuation

Separation, Divorce and Superannuation

Superannuation and Insurance
separation divorce and superannuation

Did you know that your ex may be able to claim half your superannuation, even if you aren’t married?

Although moving in with your significant other can be exciting, under certain circumstances, this could spell disaster for your superannuation.

Moving in together is an exciting time for people in relationships. Likely the last thing on your mind is what might happen in the event of a break-up.

paying superannuation death benefits

Paying Superannuation Death Benefits

Superannuation and Insurance
paying superannuation death benefits

A superannuation death benefit is a payment made by a super fund to a dependent beneficiary or to the trustee of a deceased estate after the member has died.

The trustee of the super fund should make this payment as soon as possible after the member’s death.

The form of the benefit payment, and who it is paid to, will depend on the governing rules of your fund and the relevant requirements of the Superannuation Industry (Supervision) Regulations 1994 (SISR).

what you need to know about superannuation death benefits

What you need to know about superannuation death benefits

Superannuation and Insurance
what you need to know about superannuation death benefits

Superannuation has grown to become the largest or second-largest asset for the majority of Australians.

The combined total of superannuation accounts in Australia means that this country has the third largest pension fund assets in the world (behind only USA and UK with their much larger populations).

It is a surprise to most Australians to learn that their retirement savings are held in trust, and a shock for them to discover that the terms of that trust frequently reserves discretionary powers to the trustee(s) of that trust.

Superannuation Death Benefits – Be Warned

Contested Estates, Probate and Deceased Estates
Superannuation Death Benefits Be Warned

As a matter of law an entitlement under a superannuation fund does not automatically form part of the assets of a deceased estate.

All superannuation funds in Australia are trusts, which are governed by their respective deeds of trust, subject to the Superannuation Industry (Supervision) Act 1993 (Cth), and administered by a trustee who holds a discretion in terms of the persons whom the trustee decides should receive the superannuation trust fund proceeds.

Wills and Estate Planning Adelaide: DIY Superannuation

Death Benefits, Estate Planning, Pensions and Retirement Planning, Superannuation and Insurance, Trusts
Wills and Estate Planning Adelaide: DIY Superannuation

Have you been watching the news recently?  It has been a challenge trying to make sense of all the current news reports on this financial crisis.

A lot of Australians choose to remain blinkered about the impact that the current crisis will continue to have in our local markets as well as globally.  If you are sitting in your home in suburban Australia thinking that all these financial crisis events don’t relate to you, you might be in for a nasty surprise.

For most people, their primary concern is the cost of petrol, rising food prices, health care and housing affordability.  Those concerns don’t magically disappear when you retire…in fact they tend to get magnified through the lense of “fixed income”.

Chances are that you have some form of superannuation and in most cases it is probably a managed super fund.

At the moment, almost all of the big managed super funds in Australia are announcing huge (20% to 30%) reductions (losses) of capital of value.  Some funds have lost more than 30%. They might try to “spin” this as no big deal, and encourage you to take a “long-term” view of the market performance.  They’ll show a graph of managed-funds values over 20 years or so, and say that you have to expect some “swings and roundabouts”.  Of course the fund managers get paid whether the fund values go up or down …

Maybe this isn’t too alarming for some people. However, if you’re in your 60’s and looking to retire the next couple of years, how do you recover from a pretty big dent in your retirement fund?

You might be forgiven for wondering just what you’ve been paying-for with those managers’ fees all these years, and whether there might be a better solution?

man-thinking-199x300.jpg

Death Benefits … Who Benefits? Do you know who will receive the benefits from your life insurance policy and superannuation fund?

Death Benefits, Estate Planning, Superannuation and Insurance, Wills
Death Benefits … Who Benefits? Do you know who will receive the benefits from your life insurance policy and superannuation fund?

You need to decide who should benefit from your assets or for whom you wish to provide financially.

You should be clear on how you want your beneficiaries to benefit – do you want them to inherit an asset, an income or cash?

Your Will cannot dictate who inherits the benefits from your life assurance policy.  You might think you can revoke the beneficiaries you have nominated on a life insurance policy by simply nominating other beneficiaries in your Will. But your loved ones might be in for a nasty surprise, when they find out (after your death) that you were wrong.

The life insurer has a contractual relationship with you as the policyholder, and they will only pay out the benefits to the beneficiaries nominated in your insurance contract, regardless of whether your Will states otherwise.

If you want to change your life insurance policy beneficiaries, you need to do this directly with your life insurance company.  You can’t do it in your Will.

Similarly, when it comes to your superannuation fund benefit, the discretion to distribute your death benefit lies with the trustees of the super fund, and they might not necessarily follow your wishes as stated on your beneficiary nomination form.  It is a complex area of the law, which may well have changed since you started with your super fund.

Death & taxes, illness & share-market corrections may be unavoidable … but they don’t have to ruin your family or your business.  Make the effort to protect the people you really care about.  Call Genders & Partners to create an integrated estate plan and avoid questions regarding death benefits in Adelaide and other areas in South Australia. And do it NOW … before it is too late.

why every south australian woman over 50 should have an enduring power of attorney

Why Every South Australian Woman Over 50 Should Have an Enduring Power of Attorney

Powers of Attorney
why every south australian woman over 50 should have an enduring power of attorney

As a woman over 50 living in South Australia, you’ve likely spent a lifetime building your assets, raising your family, and managing responsibilities with wisdom and care.

Whether you’re still working, retired, or transitioning through significant life changes, one thing is clear: now is the time to take control of your future by ensuring your affairs are protected through integrated estate planning—starting with an Enduring Power of Attorney (EPA).

While many associate estate planning solely with Wills and inheritance, the truth is that a modern, robust estate plan goes much further.

One of the most powerful yet often overlooked tools is the Enduring Power of Attorney.

bank of mum and dad the hidden dangers of family loans

Bank of Mum and Dad the hidden dangers of family loans

BOMAD
bank of mum and dad the hidden dangers of family loans

As Australia’s cost-of-living crisis drags on, a large new form of intergenerational wealth transfer has emerged.
Parents are increasingly risking their own financial security to help their adult children enter the property market.

Recent research from Compare Club’s biannual Bill Stress Index reveals the trend: one in five parents have already provided substantial financial support to their adult children, with many gifting or lending amounts exceeding $75,000.