Legal Tip 146: Who can receive your Super when you die?

Discussion in 'Legal Issues' started by Terry_w, 11th Sep, 2016.

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  1. Terry_w

    Terry_w Structuring Lawyer and Finance Broker - all states Business Member

    18th Jun, 2015
    Legal Tip 146: Who can receive your Super when you die?

    When a person dies their superannuation benefits must be paid out of the fund they were a member of. These benefits are known as “superannuation death benefits” and they will need to be paid out of the super fund by the trustee of the fund. The trustee is limited by law as to who can receive these benefits, but it is trustee that chooses who the benefits are paid to.

    The persons that are able to receive the Super Death Benefits are:
    1. The deceased person’s Legal Personal Representative (LPR), or
    2. A dependant of the deceased.
    The LPR will be the executor of the estate as appointed by the deceased under their will. If there is no will the LPR will be the Administrator of the estate as appointed by someone applying to the Supreme Court – usually a family member, but not always.

    Note that super cannot be dealt with by your will unless it is passed to your estate first.
    Legal Tip 3: Your Will cannot direct what happens to your super

    A dependant is
    1. The Spouse of the deceased
    2. A Child of the deceased
    3. Any person that was in an interdependency relationship with the deceased.

    s10A SIS Act SUPERANNUATION INDUSTRY (SUPERVISION) ACT 1993 - SECT 10A Interdependency relationship

    Generally speaking a deceased member’s superannuation death benefits will go either:
    The spouse, or
    One or more children
    But it may also be paid to the estate and it will then become part of the deceased’s will or be part of their estate for intestacy purposes.

    There are various tax issues to consider as different beneficiaries may end up paying different rates of tax on the receipt of super death benefits. I will cover this in a future tax tip.