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Australian Lawyers and Consultants

Estate Planning for Superannuation

© July 2005 by Joe Lederman, BALDWINS Australian Lawyers and Consultants

Estate planning can be a complex exercise and even moreso where superannuation funds are concerned.

Superannuation moneys do not usually form part of a Will-maker’s estate. The superannuation is in fact a separate trust and requires separate estate planning to deal with the separate superannuation benefits that will arise on death. Careful planning is needed to integrate this planning. Depending on the type of superannuation benefits, different estate planning treatments could apply.

Amongst several alternatives, one possibility is the making of a Binding Death Benefit Nomination (“BDN”). One possible advantage of BDNs is their flexibility. A BDN can allow a person to nominate who is to get their superannuation death benefits, and can split the different types of benefits for differential tax treatments, concessions, thresholds in favour of different dependants either separately, concurrently or successively. The definition of dependants in the superannuation legislation has been broadened to include “interdependency relationships”, and may now include certain eligible de facto and same-sex relationships.

Despite their advantages, BDNs are not always available however, because the terms of some pensions may not permit for the making of them.

Binding Death Benefit Nominations also have pitfalls to note, including: they must be signed by the Member every three years, and are not “portable” from one fund to another, but must be remade for each superannuation fund to which the signer belongs.

For further information, contact Joe Lederman at BALDWINS, Australian Lawyers & Consultants.

Return to the Baldwins Homepage or Australian Tax Law Library.