WA Super News

Take 5! What happens to my super when I die?

27/03/2014

Take 5! What happens to my super when I die?

Each month we will explore a different topic in Take 5! This month we look at the sad but necessary topic of 'What happens to my super when I die?'

1. How much is paid?

Most of us don’t like talking about dying or thinking that we are all going to pass away one day. But it’s a fact of life so it’s important to think about what you want to happen to your super when you are no longer around.

In the unfortunate event of your death while you’re a member, your death benefit (your super account balance plus any insurance benefit you may have) will be paid to one or more of your dependants according to super law and/or the legal representative of your estate.

A death benefit is your super account balance plus any insurance benefit you may have. 

2. Nominating beneficiaries

To make sure WA Super knows what you’d like to happen to your super after you’re gone, you can choose a beneficiary. Your beneficiary is the person you nominate to receive your superannuation benefits if you die. Generally, your beneficiary must be a dependant under superannuation law.

A dependant include any of the following:

  • Your spouse (including legal, ex-nuptial, de facto and same sex couples);
  • Your children (including step, ex-nuptial, adopted and your spouses’ children);
  • Any person who was financially dependant on you at the time of your death; and
  • Any person who was in an interdependency relationship (see below) with you at the time of your death.

An “interdependency relationship” exists where two people:

  • Have a close personal relationship and live together; and
  • One or both of them provides the other with financial support, domestic support and personal care.

An interdependency relationship also exists if two people have a close personal relationship and the other requirements are not met because one or both suffer from a physical, intellectual or psychiatric disability.

You can nominate a beneficiary for your super on your application form. You may also change this later if you wish, using a Change of nominated beneficiaries form or online in the secure member log in area.

It is important to note when determining whom to pay your balance to, the Trustee will always consider your wishes but the Trustee is NOT bound to follow your nomination. If your nominated beneficiary is no longer a dependant or you haven’t nominated anyone, the Trustee will use its discretion in determining who receives the benefit.

Are there different ways of nominating beneficiaries?

Option

What happens to your death benefit?

Binding nomination
(Not available at WA Super)

If you provide a binding nomination that satisfies all legal requirements and which has not expired (binding nominations expire after three years unless you renew them) the trustee of the super fund must pay your benefit to the beneficiaries you have nominated and in the proportions specified.

Non-binding nomination

The trustee of the super fund will decide which of your beneficiaries will receive your death benefit and in what proportion. Your nominated beneficiaries will be taken into account.

No nomination

Depending on the product, the trustee will either pay your death benefit to your estate or it may use its discretion to determine the beneficiaries.

You should keep your beneficiaries up to date and in line with your personal circumstances. If you don't, your death benefit might not go to the people you want it to.

3. Tax on death benefits

  • Lump sum superannuation benefits paid on your death to your spouse, ex-spouse, children under 18 or any other dependants will be tax free.
  • Lump sum superannuation benefits paid on your death to others (eg non-dependant adult children) will be taxed up to a maximum of 31.5%.

4. Get organised

To make the claim process easier for your family in the unfortunate event of your death, get organised now so they don’t have to.

  • Ensure your beneficiaries know where your Birth Certificate is located
  • Give them a copy of your Marriage Certificate (if applicable)
  • Keep your will up to date and ensure your beneficiaries know where it is kept as well as any Letters of Administration.

The more you do now, the less they will have to.

5. Financial advice

Members of WA Super have access to top-quality, full service financial planning on a fee-for-service basis. They can provide high quality financial advice and help you understand the death benefit process and maximise the value passed on to your dependants. Now with the ability to provide financial advice both inside and outside of super your Financial Planner can provide a comprehensive strategy for wealth creation now, not just in retirement. Our staff are salaried employees and therefore do not receive commissions. 

Contact us and book your appointment now, initial consultation is free.

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