What happens to your superannuation when you die?
Death comes to us all, but the question of what happens to your superannuation when you die can be a tricky one. So, it’s time we addressed the elephant in the room – if you don’t have an up-to-date Will and Estate plan, where does that leave your super?
In this blog post, we tackle one of life’s tough questions with wit, insight, and knowledge – arming you with the information needed to make clear-headed decisions about what will happen to your hard earned super when you shuffle off this mortal coil.
What happens to your superannuation when you die?
Superannuation is a retirement savings plan that many of us take advantage of to secure our financial future. But what happens when the beneficiary of this plan—that is, you—dies? To ensure that your superannuation doesn’t disappear into the ether or become subject to a lengthy probate process, making beneficiary nominations can be an invaluable tool. It allows for clear communication about what happens to your superannuation when you die especially who should receive your superannuation funds when that happens. That way, your beneficiary can receive the money efficiently when the time comes and properly utilize it according to your wishes.
So don’t forget to consider beneficiary nomination and keep yourself financially secure long after you’re gone.
How do you nominate a beneficiary for your superannuation?
Nominating a beneficiary for your superannuation is an important decision that can significantly impact your estate planning. Beneficiary nomination provides the clearest direction for you and your superannuation fund trustees so they know who should receive the balance of your superannuation if something happens to you. It’s important to review beneficiary nominations regularly too in case life circumstances have changed. Nominating a beneficiary is easy and just requires completing a form with your super provider or adviser.
So go on – give yourself some peace of mind and ensure your beneficiary nomination is up to date.
Tax implications of nominating a beneficiary for your superannuation?
Knowing who will benefit from your estate is an important consideration when it comes to your superannuation. Making beneficiary nominations are a great way to ensure that the intended beneficiary can access the taxable component in the most efficient manner. However, it’s important to consider that nominating a beneficiary comes with tax implications, including a 15% tax on any taxable component when paid out to an estate of a non-dependant adult beneficiary, plus any applicable Medicare levies if they have been nominated directly.
Before making any beneficiary nominations you should seek out personal advice from a financial professional to make sure you pay the least amount of tax possible.
Things to consider when nominating a beneficiary for your superannuation?
When considering beneficiary nomination for your superannuation, there are some important factors to keep in mind. Firstly, think about who best will manage and look after your funds once you pass away – do they need instructions on how the beneficiary nomination works or are they already financially savvy?
Secondly, review whether the beneficiary nomination rules of your super fund allow you to select more than one beneficiary. If so, decide which would benefit more from receiving your superannuation now and in the future.
Finally, consider updating beneficiary nominations regularly throughout life’s changes just to ensure that your wishes regarding superannuation are carried out exactly as you’d like them to be.
What happens to your superannuation when you die is an important consideration in planning for the future. Remember, it pays to take a few moments of planning now to provide greater peace of mind later.
How can you change or cancel a nomination for your superannuation?
Making beneficiary nominations for your superannuation is a great way to ensure that the funds and assets you have built up over your career are secure and looked after. But if you need to change or cancel such a nomination, it can be done quickly and efficiently with minimal fuss.
Reviewing beneficiary allocations regularly is a great way of ensuring that your wishes for your superannuation are up to date and take into account any significant life changes.
Knowing the right process can save time, money, and stress – so, if you want to make changes or cancelations to beneficiary nominations, now may be the best time!
What types of beneficiary nominations are there and do they expire?
Beneficiary nominations are a great way to ensure that your superannuation and other assets are distributed according to your wishes in the event of your death. There are two primary beneficiary nomination types: binding and non-binding.
Binding beneficiary nominations must be recognized by the fund, whereas non-binding beneficiary nominations don’t necessarily have to be followed by the fund after you die. It is important to note that beneficiary nominations can expire – typically non-binding beneficiary nominations will lapse after three years if a new nomination isn’t made, however some super funds offer what’s known as “non-lapsing” beneficiary nominations which stay valid until you change them or when the beneficiary dies.
As you can see, there are a lot of things to consider when it comes to nominating a beneficiary for your superannuation. It’s important to get started early and make sure that everything is in order so that you know what happens to your superannuation when you die and so that your wishes are carried when that happens.
If you have any questions or would like to discuss your options, please don’t hesitate to get in touch with Wealth Factory today. We’re always happy to help our clients plan for their financial future.
