Your superannuation death benefits do not automatically form part of your estate. How you deal with your superannuation though, is an important part of your estate planning.
Recent research reveals that at least 6.5 million Australians have no say in who receives their superannuation when they pass away, either because they have made no nomination at all or their nomination is not legally binding.1
Further, disputes over superannuation death benefits are becoming more common, especially in blended families. It is therefore critical to keep nominations up to date and aligned with your estate planning.
Who can receive your superannuation?
Your superannuation death benefit can only be paid to:
- Your dependents, such as:
- your spouse or de facto partner;
- your children of any age, or
- someone in an interdependent relationship with you.
- Your legal personal representative (i.e. the executor of your estate).
Types of death benefit nominations
| Type of Nomination | Legally Binding | Trustee Discretion as to beneficiary | Validity |
| Non- Binding Death Benefit Nomination | No | Yes | Usually indefinite |
| Binding (Lapsing) Death Benefit Nomination | Yes | No, except if it has lapsed/expired | Typically expires after 3 years |
| Non Lapsing Binding Death Benefit Nomination | Yes | No | Does not expire unless changed |
Tax consequences
Superannuation death benefits may be taxed, depending on:
- who receives the benefit (tax dependents vs non-tax
dependents);
- The components of the super (taxable vs tax-free), and
- Whether it is paid directly or via the estate.
Proper planning can reduce or avoid unnecessary tax.
Why it matters
Superannuation is one of the most significant assets Australians hold, but unlike other assets, it does not automatically follow your will. Without a valid binding nomination, you risk leaving its distribution to chance or dispute. A properly executed binding nomination gives you peace of mind and ensures your wishes are followed, however it is not the best option for everyone.
Contact an Estate Planning Lawyer at McCarthy Durie Lawyers who can:
- help you make legally valid binding nominations;
- coordinate your Will and superannuation to work together;
- advise on tax-efficient strategies, and
- prevent or minimise future disputes or unintended outcomes.
Footnote
1 Nassim Khadem, 'Who Gets Your Super When You Die? The Trap That Could Derail Your Final Wishes' (ABC News, 26 August 2025) https://www.abc.net.au/news/2025-08-26/who-gets-your-superannuation-when-you-die-binding-death-benefits/105678326.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
