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Superannuation….. Who gets it when I die?

It comes as a surprise to many people to learn that they do not own their superannuation and therefore cannot include their superannuation as an asset to be disposed of by Will. After the death of a member of a superannuation fund, the superannuation entitlement of the deceased person is paid at the discretion of the trustee of the superannuation fund of which the deceased person was a member unless that deceased person has filed with the trustee a Binding Death Benefit Nomination (BDBN). If the trust deed governing the superannuation fund provides for the filing of a BDBN and if a BDBN has been filed (and assuming it is correctly completed and executed then the trustee of the superannuation fund is bound to abide by that BDBN and pay the superannuation in accordance with it. Effectively the BDBN can be an extension of the Will in that it can bind the trustee to pay the superannuation in accordance with the wishes of the deceased person. It is advisable for a member of a superannuation fund to file a BDBN (if possible) however advice from an accountant should be obtained to ensure that the superannuation is disposed of in the most tax effective way and if not, that the member of the superannuation fund is aware of the consequences of his or her action.

The superannuation of a deceased person is often significant (particularly if there is an insurance component) and therefore care should be taken when deciding who should receive the superannuation. There can be taxation consequences. Also, the terms of the Will of the person completing the BDBN should be taken into consideration. In some circumstances, there are competing claimants for the superannuation, particularly where the member of the fund has been divorced and there are children from each of the marriages.

Estate planning can be complex.

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