Superannuation and Your Will in Australia: Who Gets Your Super?

Your superannuation can be one of your largest assets, but it is not automatically controlled by your will. This guide explains how super and wills interact, and how to ensure your super goes where you want.

The Critical Fact: Super Isn't Part of Your Will

Key Point: When you die, your superannuation is paid according to your death benefit nomination with your super fund, NOT according to your will. If you don't make a nomination, the fund trustee decides.

This means your carefully planned will might distribute your assets exactly as you intended, while your super (potentially hundreds of thousands of dollars) goes somewhere completely different.

Types of Death Benefit Nominations

Binding vs Non-Binding Nominations

How Each Nomination Type Works

The difference between these options decides how much control you keep:

• Binding nomination: A binding nomination that is valid and in effect generally directs the trustee, so the fund must pay your super to the people you name. The trade-off is that most lapse after 3 years (SIS Regulations reg 6.17A(7)). Once a binding nomination lapses, the trustee generally decides who receives your super under the fund's rules. That is why setting a renewal reminder matters.
• Non-lapsing binding nomination: Some funds offer a binding nomination that does not expire under their own rules. Where offered, it generally stays in force until you change or revoke it, which removes the renewal burden but means an out-of-date nomination can sit unnoticed for years. Review it after major life events even though it never lapses.
• Non-binding nomination: This is a guide to the trustee, not a direction. The trustee considers your wishes but makes the final decision, which gives flexibility where your circumstances are uncertain but less certainty about the outcome.
• Reversionary nomination: Where you are receiving a super pension (income stream), a reversionary nomination, if your fund's rules allow it, means the pension automatically continues to a nominated dependant, often your spouse, on your death rather than being paid out as a lump sum. This is a separate mechanism from a binding lump-sum nomination, so check which applies to your account.

To keep a nomination effective, it must remain valid: the person you name must still be an eligible beneficiary (such as a dependant or your legal personal representative), the form must be correctly completed and witnessed, and a lapsing nomination must be renewed before its expiry date.

Which Nomination Type Should You Choose?

Who Can You Nominate?

You can only nominate certain people or entities:

Direct Nominations

Why Nominate to Your Estate?

Nominating your legal personal representative (estate) means your super flows into your estate and is then distributed according to your will. Benefits:

• Flexibility: Your will can specify exactly who gets what
• Testamentary trusts: Super can flow into trusts for children
• Blended families: Easier to balance between different family groups
• Updates: Change your will without updating super nomination

Tax on Superannuation Death Benefits

Tax treatment depends on who receives the super and their relationship to you. Tax law uses its own definition of "dependant", which is different from the super law definition above. The tables below are for lump sums; income streams are taxed differently.

Tax-Free Recipients (Dependants for Tax)

Taxed Recipients (Non-Dependants)

These are the ATO's maximum rates for a lump sum paid directly to the person. The ATO says the Medicare levy is 2% on super payments taxed above 0%. The tax-free component is not taxed. If the super is paid to your estate instead, the ATO says the estate is taxed on the share going to non-dependants at 15% (taxed element) and 30% (untaxed element).

Worked Example

John (age 65) dies with $500,000 super:

• Tax-free component: $200,000
• Taxable component: $300,000

Planning Tip: If you want to leave super to adult independent children, you could ask a financial adviser whether leaving it to your spouse (tax-free) instead suits your family. That choice has other consequences, so get advice first.

How to Make a Binding Nomination

Step-by-Step Process

1. Log into your super fund online or contact them
2. Request binding nomination form (many funds have online forms)
3. Complete the form specifying:

• Beneficiary names and relationships
• Percentage each should receive
• Whether binding or non-binding

4. Have it witnessed as your fund's form says (for most funds: signed and dated in front of two witnesses aged 18 or over who are not named in the nomination; SMSFs follow their trust deed)
5. Submit to your fund
6. Set a calendar reminder to renew before it lapses (3 years at most for most binding nominations, unless your fund offers non-lapsing ones)

Common Nomination Structures

Coordinating Super with Your Will

The Complete Picture

Alignment Checklist

• Located all superannuation accounts (use ATO Super Search)
• Made binding nomination for each account
• Nominations align with will intentions
• Noted expiry dates for each binding nomination
• Calendar reminder to renew before expiry
• Life insurance beneficiaries aligned

Common Super Mistakes

Mistakes That Cost Families

After Life Events: Update Nominations

Finding Lost Super

It is easy to lose track of an old super account. To find all your super:

1. ATO Super Search: Log into myGov linked to ATO
2. Check old employer records: Former employers may have records
3. Contact funds directly: If you remember old fund names
4. Consider consolidating: Can reduce fees and is easier to manage, but check first that you will not lose insurance cover

State-Specific Considerations

Super is governed by Commonwealth law (Superannuation Industry (Supervision) Act 1993), so the legal rules are the same across Australia, although each fund's own rules differ. However, your will is governed by state law, so coordination matters:

Official Resources

Superannuation death benefits are not governed by the state wills acts. Your super is paid under your fund's trust deed and its binding nomination rules, within the framework of Commonwealth superannuation law. For the current rules on how death benefits are paid and taxed, see the ATO's guidance on superannuation death benefits.

Related Guides

• Minor Children and Guardianship in Wills – Coordinating super with children's trusts
• Testamentary Trusts Australia – How super flows into trusts
• Estate Administration Guide – What executors need to know about super
• How to Make a Will in Australia – Complete will-making guide

Take Control of Your Super

WillBuddy helps you understand how to coordinate your superannuation with your will. While we can't make your super nomination for you (that must be done directly with your fund), if you list super when you make your will, our after-signing checklist reminds you to contact each fund and make or renew a nomination.