Superannuation doesn't automatically form part of your estate when you die. Unlike a bank account or property, your super is held in a trust by your fund's trustee — and the trustee has the legal discretion to decide who receives it. This makes beneficiary nominations critically important, and many Australians get this wrong.
Who gets your super?
Your super can be paid to your dependants or your legal personal representative (your estate). Under superannuation law, dependants include:
- Your spouse (including de facto and same-sex partners)
- Your children (of any age)
- Anyone in an interdependency relationship with you
- Anyone who was financially dependent on you at the time of death
Types of beneficiary nominations
Non-binding nomination
You nominate who you'd like to receive your super, but the trustee has the final say. They will consider your wishes alongside other factors. This is the default in most funds.
Binding nomination
The trustee must pay your super to the nominated beneficiaries, provided the nomination is valid. Most binding nominations expire after 3 years and must be renewed — if they lapse, the trustee reverts to discretion.
Non-lapsing binding nomination
Like a binding nomination but doesn't expire. Not all funds offer this. If yours does, it's generally the best option as it removes the risk of forgetting to renew.
Super death benefits and tax
The tax treatment of super death benefits depends on who receives them and how:
| Recipient | Tax treatment (lump sum) |
|---|---|
| Tax dependant (spouse, child under 18, financial dependant) | Tax-free |
| Non-tax dependant (adult child, sibling, parent) | Taxed element taxed at up to 15% + 2% Medicare |
| Estate (then distributed per will) | Depends on ultimate recipient |
For a deeper dive into the tax implications, see our super death benefit tax guide.
Insurance and death benefits
Many Australians have life insurance inside their super without realising it. If you die, the insured amount is paid into your super account and then distributed alongside your accumulated balance. Check your most recent annual statement or log into your fund to see if you have death cover and what the insured amount is. See our insurance inside super guide for more detail.
What to do now
- Log into your super fund and check your current nomination
- If you have no nomination, or it's expired, update it immediately
- Consider a binding or non-lapsing binding nomination if your fund offers it
- Review your nomination after any major life event — marriage, divorce, children, separation
- Make sure your will and your super nomination are consistent
Related guides
- Super beneficiary nominations explained
- Super death benefit tax
- Super and divorce
- Insurance inside super