Your superannuation is likely one of your largest assets, but many Australians don't realise it's not automatically controlled by their will. This guide explains how super and wills interact, and how to ensure your super goes where you want.
Quick Answer
Your superannuation is NOT automatically controlled by your will. It is paid according to your binding death benefit nomination, or if you don't have one, the fund trustee decides who receives it.
- Make a binding nomination: This legally directs your fund who receives your super; most lapse after 3 years and must be renewed.
- Nominate your estate to use your will: Naming your legal personal representative lets super flow into your estate and through your will, including into testamentary trusts.
- Watch the tax: Super to dependants (spouse, children under 18) is generally tax-free, but non-dependants can be taxed up to 32% on the taxable component.
- Keep nominations current: Update after marriage, divorce or changing funds, and align them with your will's intentions.
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 who receives it.
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.
| Asset Type | Controlled By |
|---|---|
| Bank accounts, property, shares | Your will |
| Superannuation | Death benefit nomination |
| Life insurance (inside super) | Death benefit nomination |
| Life insurance (outside super) | Policy beneficiary / Your will |
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
| Type | Effect | Duration |
|---|---|---|
| Binding nomination | Fund MUST follow (if valid) | Usually 3 years |
| Non-lapsing binding | Fund MUST follow, doesn't expire | Until you change it |
| Non-binding nomination | Fund considers but decides | Ongoing |
| No nomination | Fund decides entirely | N/A |
How Each Nomination Type Works
The difference between these options decides how much control you keep:
- Binding nomination: A valid binding nomination legally 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. Once a binding nomination lapses, it reverts to being treated as non-binding (or as if no nomination exists), and the trustee regains discretion. That is why setting a renewal reminder matters.
- Non-lapsing binding nomination: Some funds offer a binding nomination that does not expire. It 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 your super is paid as a pension (income stream), a reversionary nomination directs that the pension automatically continues to a nominated dependant, usually 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?
| Situation | Recommended Type |
|---|---|
| Simple estate, stable relationships | Binding (review every 3 years) |
| Complex estate, want certainty | Non-lapsing binding |
| Uncertain about beneficiaries | Non-binding (gives trustee flexibility) |
| Blended family | Binding to estate (flows through will) |
Who Can You Nominate?
You can only nominate certain people or entities:
Direct Nominations
| Eligible Nominees | Who This Includes |
|---|---|
| Spouse | Married partner, de facto partner (including same-sex) |
| Children | Biological, adopted, stepchildren, ex-nuptial children |
| Financial dependants | Anyone financially dependent on you |
| Interdependency relationship | Person you live with in close personal relationship |
| Legal personal representative | Your estate (the executor of your will) |
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
| Scenario | Direct Nomination | Via Estate |
|---|---|---|
| Simple: spouse gets everything | Good option | Also works |
| Children need trust protection | Can't create trust | Flows to testamentary trust |
| Blended family | Complex to balance | Will handles distribution |
| Frequent changes expected | Must update each fund | Update will only |
Tax on Superannuation Death Benefits
Key point
Super paid to dependants (spouse, children under 18, financial dependants) is generally tax-free, but super paid to non-dependants such as adult independent children can be taxed up to 32% on the taxable component.
Tax treatment depends on who receives the super and their relationship to you.
Tax-Free Recipients (Dependants)
| Recipient | Tax Treatment |
|---|---|
| Spouse | Tax-free |
| Children under 18 | Tax-free |
| Children 18+ who are dependants | Tax-free |
| Financial dependants | Tax-free |
| Interdependency relationship | Tax-free |
Taxed Recipients (Non-Dependants)
| Recipient | Tax on Taxable Component |
|---|---|
| Adult children (independent) | Up to 17% + Medicare levy (≈19%) |
| If untaxed element | Up to 32% + Medicare levy |
| Siblings, parents, friends | Same as adult children |
Worked Example
John (age 65) dies with $500,000 super:
- Tax-free component: $200,000
- Taxable component: $300,000
| If received by | Tax |
|---|---|
| Wife Sarah | $0 |
| Son (age 16) | $0 |
| Son (age 30, independent) | ~$57,000 on taxable component |
Planning Tip: If you want to leave super to adult independent children, consider whether it's more tax-effective to leave it to your spouse (tax-free) who can then make gifts during their lifetime.
How to Make a Binding Nomination
Step-by-Step Process
- Log into your super fund online or contact them
- Request binding nomination form (many funds have online forms)
- Complete the form specifying:
- Beneficiary names and relationships
- Percentage each should receive
- Whether binding or non-binding
- Have it witnessed by two adults (not beneficiaries)
- Submit to your fund
- Set a calendar reminder to renew before it lapses (usually 3 years)
Common Nomination Structures
| Structure | Example | Best For |
|---|---|---|
| 100% to spouse | Spouse: 100% | Married, no children from prior relationships |
| 100% to estate | Legal personal representative: 100% | Blended families, trust planning |
| Split | Spouse: 50%, Estate: 50% | Mixed approach |
| Children directly | Child 1: 50%, Child 2: 50% | Adult independent children, no spouse |
Coordinating Super with Your Will
The Complete Picture
| Asset | Nomination | Flows To |
|---|---|---|
| Super Fund 1 | Binding → Estate | Your will → Beneficiaries |
| Super Fund 2 | Binding → Estate | Your will → Beneficiaries |
| Life insurance (in super) | Same as super | Your will → Beneficiaries |
| Bank accounts | N/A | Your will → Beneficiaries |
| Property | N/A | Your will → Beneficiaries |
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
| Mistake | Consequence | Prevention |
|---|---|---|
| No nomination | Fund decides, may not match wishes | Make binding nomination |
| Expired binding nomination | Reverts to fund's discretion | Set renewal reminders |
| Nomination to ex-spouse | Ex receives super despite divorce | Update after separation |
| Direct to adult children | Potential 19-32% tax | Consider via spouse or estate |
| Forgot about old funds | May go to wrong person, or unclaimed | Consolidate funds |
| Didn't consider life insurance in super | Same issues as super itself | Check and nominate |
After Life Events: Update Nominations
| Event | Action Needed |
|---|---|
| Marriage | Add spouse as beneficiary |
| Divorce/separation | Remove ex-spouse immediately |
| New children | Consider adding or nominating to estate |
| Children turn 18 | Reassess, they're now non-dependants for tax |
| Changed super funds | Make new nomination with new fund |
| Spouse dies | Update nomination |
Finding Lost Super
Many Australians have multiple super accounts they've forgotten about. To find all your super:
- ATO Super Search: Log into myGov linked to ATO
- Check old employer records: Former employers may have records
- Contact funds directly: If you remember old fund names
- Consider consolidating: Reduces fees, easier to manage
State-Specific Considerations
Super is governed by Commonwealth law (Superannuation Industry (Supervision) Act 1993), so the rules apply uniformly across Australia. However, your will is governed by state law, so coordination matters:
| Aspect | Federal/State |
|---|---|
| Super nominations | Federal (same nationwide) |
| Tax on death benefits | Federal (same nationwide) |
| Will validity | State (varies) |
| Estate administration | State (varies) |
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), we'll guide you through the process and ensure your will is structured to receive super appropriately.
Reviewed and current as at 12 June 2026.
This article is general information only and is not legal advice. Laws change over time and vary between Australian states and territories, so always confirm the current position and consider advice from a qualified legal professional for your specific circumstances.