For many Australians, superannuation is the largest single asset they will accumulate over a working lifetime. Yet despite its size, superannuation is also one of the most misunderstood assets from an estate planning perspective. The critical point — one that surprises many clients — is that your superannuation does not automatically pass according to your Will.
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.
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.