Who Can I Leave My Superannuation Death Benefit To?
Superannuation is not your asset, and you have to make sure you tell the trustee of your superannuation fund who you want your superannuation death benefit to go to. To make it even harder, there is only a small range of people who are eligible to receive a superannuation death benefit.
The superannuation legislation only allows you to leave your superannuation death benefit to a dependant, or your legal personal representative (your executor in your Will, so that you can disperse your superannuation under your Will). A dependant is your spouse, a child (of any age), or any person other person in an interdependent relationship with you.
A spouse is someone with whom you live as husband or wife, whether you’re married or not, and whether you’re same-sex or not.
A child includes a step-child, an adopted child and an ex-nuptial child. It does not include a grandchild unless the grandchild has been adopted by you, even if the grandchild is being brought up by you as your own child.
So, you can see that these options are not suitable for everyone. As a young person without a spouse or children, you may want to leave your superannuation to your parents. To do this, you must nominate your legal personal representative to be your beneficiary. That way the superannuation will be paid into your estate, and then in your Will you would leave your superannuation death benefit to your parents.
If you are part of a blended family, you may want your superannuation death benefit to be left only to your own children, and not to your step-children. You would need to nominate your legal personal representative to be your beneficiary, so that the superannuation will be paid into your estate. Then in your Will you would leave your superannuation death benefit to your children.
There are many other examples. So the advice is that you need to get individual advice about your superannuation death benefit and your estate.
The other factor to consider is tax. A beneficiary of your superannuation death benefit will pay tax, unless it is your spouse, interdependent person, or a child under 18 years of age. So even though you can leave your superannuation death benefit directly to your adult children, be ware that they will be taxed. Again, please get specific advice for your circumstances.