Heffron | Australia's leading independently owned SMSF administrator

Name your beneficiaries

When you die, your super must be paid out to someone. For most people, this would be paid to your spouse, children or estate.

Your superannuation balance and any insurance benefits are not automatically covered by your will. Your will only ever becomes relevant for your super benefit if the trustee of your fund pays the benefit to your estate.

There are steps you can take to guide or instruct the trustee of your SMSF on how to deal with your superannuation and insurance benefit upon your death:

  • non-binding death benefit notice. This is an expression of your wishes and is not legally binding on the trustee. It could be a letter or minute (notes taken at a meeting of the SMSF trustees) saying what you'd like to happen in the event if your death.
  • binding death benefit notice. If the trustee is given a valid binding death benefit notice, they are required to follow your instructions.

People often use binding death benefit notices when they want to be absolutely sure that the trustee will pay their super to their estate when they die – so that it will fall under their will.

If you put a binding notice in place, remember, it is a very powerful document. It is effectively a will for your superannuation which is one of your largest financial assets. Many people get professional advice before taking this action.

When we set up your SMSF, we will give you a template for a non-binding death benefit notice. It is not compulsory to use this particular template or to have one of these notices at all. If you would like to put a binding death benefit notice in place, please contact us and we will provide you a template. Again, it's not a requirement to use this template but it does help to ensure that you meet the relevant legal requirements.