Common Mistakes with Estate Planning for Super

Common Mistakes with Estate Planning for Super

It is important to ensure that if you pass away, your superannuation savings end up with the right beneficiary.

The trustee of your super fund has the ability to consider your potential beneficiaries and decide who should receive the money. But you might be able to give instructions through a binding death benefit nomination if your super fund offers this option.

The trustee will have no choice but to follow these instructions if your nomination is valid and current at the time of your death,

This is where many people make some very simple but significant mistakes. They either don’t keep the nomination up to date or fill in the forms incorrectly. These mistakes make the nomination invalid and ineffective.

Here are some tips to help you avoid these mistakes:

  1. Renew your nomination regularly. Most binding nominations need to be renewed every three years or they lapse. It might be easier to diarise a renewal every year, perhaps on 1 July or when your super statement arrives.
  2. Make sure the person you nominate is appropriate. You can only nominate a beneficiary who meets the super rules to be nominated. This includes your current spouse, child or another person who is either financially dependent upon you or in an interdependency relationship with you. Your nomination is not checked until after you have passed away and if you nominated a wrong person, the nomination is invalid. If you want the money to go to someone who is not an allowed beneficiary you could nominate your estate and provide instructions in your will.
  3. Review if your circumstances change. If your circumstances change (e.g. you marry, have a child or separate from your partner) look at who was nominated as your beneficiary and make changes if necessary.

It can be hard to think through all the issues needed for effective estate planning. Ask us today for help in assessing and reviewing your options.

Speak to our Certified Financial Planner – Frank Santagada CFP® Dip FP AFB C.Dec

Contact us on 07 4775 5199