Do you know what happens to your super when you’re no longer here?

Most of us prefer not to think about when we’re no longer here. However, like taxes, unfortunately death will happen to all of us eventually (sorry to state the obvious).

During your time on the right side of the turf, you have more than likely contributed money into super for your retirement. Whether this is a self managed super fund (SMSF) or an industry/retail fund is not relevant at this stage. What is relevant is how you’ve directed your super (assuming you haven’t spent all your kids inheritance prior to departure) to be dealt with after you’re gone.

With an industry/retail superfund, your super provider should have requested the details of a ‘beneficiary’ to receive your super after your death. This beneficiary can be a spouse or child (dependent or non dependent).

With a SMSF, the process is slightly different. Whilst you still have the same ability to leave your super to a ‘beneficiary’, it is up to you to ensure you have completed the appropriate paperwork to ensure your super benefits end up in the right hands.

SMSF members will appoint their beneficiary via a ‘binding death nomination’ (BDN). Whilst we encourage our clients to review their BDN every 3 years, very few actually do. Some clients have not even appointed a beneficiary let alone reviewed them recently.

In the case of the above, when you pass away without a BDN, your SMSF super would normally go to your estate. As you should be aware, any Will can be challenged, therefore leaving your super proceeds vulnerable to be paid to the wrong person.

The only way to make sure your super ends up in the right hands (per your wishes), is to have a compliant BDN in place within your SMSF. A BDN cannot be challenged under a will, so therefore is guaranteed to be paid to the right person/s.

So next time you look at your SMSF, don’t be that client that puts their head in the sand….remember you should have a Binding Death Nomination and preferably current!



Kim Jay