Understanding Who Can Receive Your Superannuation Death Benefits
Superannuation is a crucial part of estate planning. However, it's not as straightforward as leaving your assets in a Will. The Superannuation Industry (Supervision) Act 1993 (Cth) (Act) defines who can receive a superannuation death benefit.
Who Can Receive Your Superannuation Benefits?
A 'dependant' under the Act includes:
- Your spouse or de facto partner.
- Any of your children, including adopted and step-children.
- Anyone with whom you had an 'interdependency relationship'.
What is an 'Interdependency Relationship'?
Two people have an 'interdependency relationship' if they have a close personal relationship, live together, and provide each other with financial support and domestic care. This relationship can also exist if one or both suffer from a physical, intellectual, or psychiatric disability.
What Happens to Your Superannuation Death Benefit?
If a dependant receives your superannuation death benefit, it becomes their legal property and doesn't form part of your estate. If the dependant is a child under 18 or has a disability, their parent or legal guardian will hold the benefit until they turn 18.
Can Non-Dependants Receive Your Superannuation Death Benefit?
Parents, siblings, and grandchildren can't directly receive your superannuation death benefit unless they're in an 'interdependency relationship' with you. However, you can ensure they receive your death benefit by making a binding death benefit nomination in favor of your legal personal representative, who can then distribute it according to your Will.
Conclusion
Understanding who can receive your superannuation death benefits is crucial for your estate planning. It's recommended to seek specialist advice to ensure your superannuation aligns with your estate planning objectives.