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What happens to your super when you die

Your super is your money. You get to decide who you want your super to go to if you die, so you can make sure your money is looking after them. 

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Watch (3 minutes)

If the worst should happen

Choosing who gets your super when you die is as easy as it is important. Josh from the IOOF team explains how to make it a top priority task for your life admin.

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Using super to look after your loved ones

Your money in super is for your retirement. But if you die before you retire, what happens to it? It’s still your money and as with other choices about your super, you get to decide who you wish to benefit from your super savings, as well as any insurance benefits you may have. That way, your savings and any insurance benefits can give financial support to your family members or loved ones. 

Expert tip

"Choosing who gets your super is something you can do to help your family in just a few minutes. Even if you don't have much wealth, or it's all in the home you live in, any super you have can make sure your partner - and kids if you have them - are taken care of. And, you don't need to get a lawyer involved."

 Super isn’t like your house or your savings

Super is different to your other assets because it’s not generally included in your Will. Things like property, savings accounts and investments you have outside of super, are all passed on to your family or loved ones through your Will – a legal document that’s signed by you and witnessed.

But super generally isn’t included in this group of assets – called your estate. Instead, the super fund has rules about who your super can go to.

Who gets to choose?

It’s generally the responsibility of the super fund’s trustee to make choices about who gets your super when you die based on the fund’s rules. But you don’t have to leave it up to the trustee. You can nominate your own beneficiary or beneficiaries – the person or people who will get your super when you die.

Can you choose anyone?

No. There are limits on who your super can be paid to if you die. You can nominate one of the following types of dependants to get your super. Or you can share your super between more than one person, but they must all be in these groups:

A spouse can be someone you’ve legally married or a de facto spouse or partner, both same-sex and opposite-sex.

A spouse can be a person you’ve married and you’re now estranged or separated from. If you haven’t formally ended a marriage, your husband or wife can still be your dependant under super law. So, while you can’t be legally married to two people at the same time, it’s still possible to choose two spouses – a legally married spouse and a de facto spouse – to receive your super. You may need to update your nomination if there’s a change in your relationship.

A child includes an adopted child or a stepchild as well as any child where you’re the natural parent.

If you end the relationship with the natural parent of your stepchild or the natural parent dies, the child is no longer considered your stepchild. But, they may still be considered a financial dependant or in an interdependency relationship with you. If they are, you can still choose them as a beneficiary of your super. 

This includes someone getting financial support from you that is ‘necessary and relied upon’. Without this support they would be severely disadvantaged. Financially supporting someone in a way that allows them to improve their standard of living generally does not make them your financial dependant.

Two people have an interdependency relationship when they live together and have a close personal relationship. One, or both, must also provide some financial support and domestic and personal care to the other.

Even when two people don’t live together they may still have an interdependency relationship. If they’re separated due to disability or illness, for example, or a temporary absence, such as overseas employment, they can still be considered to have an interdependency relationship. 

A Legal Personal Representative (LPR) is the person responsible for carrying out tasks on your behalf when you die. You can nominate an LPR for your super by naming them the executor of your Will. If you nominate your LPR for your super, your Will should include details about who gets your super and the size of the portion they get. 

Who isn’t your dependent? 

Your parents, siblings or other friends or relatives are not dependants, unless they live with you, are financially dependent on you, or in an interdependency relationship with you. 

If you have no dependants that come under one of the four groups described here, you can choose for your super to go to your LPR and make sure you have a Will including instructions on what happens to your super when you die.

How to choose your beneficiaries

Beneficiary is the word for someone you choose to receive your super if you die. You can choose one or more beneficiaries and let your super fund know how much each should get by making a nomination. 

There are different ways to make your nomination. Logging in, or registering for online access, to your account with us is a good way to get started, or call us for help over the phone.

Depending on the type of nomination that you want to make and the type available through your super fund you may need to sign a form, have your signature witnessed and return it to us. A non-binding nomination means that the super fund trustee will consider who you’ve chosen to get your super when you die but can make a different decision. If there is a change in your circumstances – if you get divorced for example – the trustee can take this into consideration as they’re the one that gets to make the final choice.

A binding nomination means you’ve legally advised the trustee of the fund who will get your super when you die. For the trustee to act on this advice, the person or people you nominate must be a dependant in one of the groups we’ve described when you die.

A non-lapsing nomination means that your super benefit will be paid to the person that you chose to get your super when you die, and it does not expire or need to be updated, but it usually needs to meet certain requirements to be valid. So make sure that you check these details with your super fund.

Here’s a snapshot of what happens when you make one of these nominations or when you don’t make one at all. 

Type of nomination Description Positives Limitations
No nomination Trustee will generally pay the benefit to the estate. No need to renew nominations. There is a chance super benefits could go to someone the member didn’t intend them to go to.
Non-binding nomination A member can tell the trustee who they want their benefits to go to. It will be considered by the trustee, but is not binding. The trustee can still exercise discretion if a member’s situation has changed. The trustee will make the decision on your behalf.
Binding nomination The trustee must pay benefits to the dependants and in the proportions set out. The trustee must pay benefits in accordance with their wishes. You will be reminded to review your nomination every three years The definition of Binding nominations will need to be renewed every three years.
Non-lapsing nomination The trustee is usually bound to pay your dependants in the proportions decided by you. These nominations do not lapse so less paperwork is involved

If your intentions change, you will have to change your nomination

Each fund can be different and some non-lapsing nominations may become non-binding. Always check with your super fund how any non-lapsing nomination works

 

What if you want to make a change?

There are also nominations you can make that only last for a set period of time. These are called lapsing nominations. Then there are non-lapsing nominations which will still apply no matter how long it’s been since you made your choice.

Whether you’ve made a binding or non-binding nomination, or a lapsing or non-lapsing one, you can make a change at any time. You just have to log into your super account and go through the process.


Find out how to get help nominating your super beneficiaries.    

When should you make a change?

If you haven’t chosen someone to get your super when you die, it’s an important step in getting your super sorted. So it makes sense to get onto it as soon as you can.

It’s always a good idea to think about the choice you’ve made each year when you’re doing a super check-up. And if something changes in your life – a death in the family, divorce or become a parent – think of it as a reason to take another look at who you want to get your super when you die. 

Quiz

Who chooses who gets your super when I die?

Did you know?

You’re in control of your super so you decide who gets your super when you die. But if you don’t make a choice, you super fund trustee will choose for you. 

Quiz

You get to make this choice:

Did you know?

You can change who will get your super when you die at any time. You may be asked to make a nomination when you change to a new fund. 

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