Superannuation Nominations and Your Will

Equity Trustees’ Anna Hacker urges caution with your super nomination.

“Don’t leave home without a credit card, nor depart this world without a will. A will makes life easier for your nearest and dearest, or tougher for the ex, as the case may be.” There is no age limit on dying, just think of Steve Irwin or Whitney Houston. An estimated one third of Australians die interstate, creating many potential issues with the distributions of their assets. “Dying in Victoria leaves you open to claims against your will from neighbours with whom you might have had financial dealings. In NSW, anything you’ve been giving away can be reeled back into your estate.” “There’s still a tax on dying when your will and super fund aren’t speaking to each other.” If you haven’t nominated a beneficiary to her Superannuation account your funds could end up almost anyway at the Super Funds discretion, even if you have a will in place. Going to the courts to contest a decision may end up costing those you were trying to help dearly. Worse, the will could do the rounds of the courts at the expense of those you were trying to help. “It’s essential to update your will as your financial and personal circumstances change. The same goes for your super nomination. Binding nominations lapse after three years.” Non-dependants are taxed on Superannuation fund payouts if you were to pass away, even if the Super fund was paying a pension.  “Most super funds also contain life insurance, which can be worth way more than the contributions.” “Life insurance is one of the easiest ways to ensure your estate is debt-free and distributed equitably between loved ones.”  “You need somebody you trust as executor because a will can’t entertain every contingency. Even then, if your chosen executor dies before you, your estate may not be distributed the way you’d want, irrespective of your will.”

Read more: http://www.smh.com.au/money/planning/its-a-legal-maze-if-you-will-20130205-2dvga.html