Superannuation can make up a large part of your assets, particularly if you‘ve taken out life insurance through your super fund. However, you may only have limited control over how the money will be distributed should you die. The person who receives your super money is determined by the trustee of your super fund, and is usually a dependant, such as your spouse and/or children, otherwise it goes towards your estate.
Some (but not all) super funds accept a “binding nomination”, which gives you certainty on who receives how much. You must update a binding nomination every three years, otherwise it goes out of date. You can usually only nominate a financial dependant – your spouse, children or alternatively your estate – as the beneficiary. The tax treatment for super money differs depending on the beneficiary. While financial dependants and your spouse receive the money tax-free, non-dependent beneficiaries, such as adult children, may have to pay tax.
Public trustee services
Public trustees were originally established to look after deceased estates where there was no will and no relatives. Today they still offer these services, plus they can also help you make your own will and store it securely.
Although public trustee will-making costs are competitive or free, they usually request to be the executor of your estate. Charges for this service differ depending on the state you live in, but range up to a commission of 5.5% of the value of your estate in the case of the Victorian Public Trustee. This may work out to be expensive if your estate is straightforward. However, in complicated cases, such as when trusts are being established for funds inherited by young children and there are a number of complicated taxation issues to resolve, the fees can be very competitive. In some states, public trustees charge an hourly rate rather than commission for administration costs. Public trustees also offer trust administration services and can look after your affairs if you become incapacitated and give them an enduring power of attorney.
Public trustees are state government agencies; you can find their contact details in the phone book or by searching on the Australian Government website.