Gerard Malouf & Partners Manage Cases For Clients Across All Areas Of Personal Injury Law, Inheritance Disputes And Superannuation Disputes.
Gerard Malouf & Partners Have Provided Friendly, Experienced Legal Advice To Communities Across Australia For Over 35 Years. Our Personal Injury Lawyers Have Taken On Ten’s Of Thousands Of Cases And We Are Proud To Have Won Billions Of Dollars For Our Clients.
Meet The Diverse And Dynamic Team Of Compensation Lawyers And Supporting Staff That Have Made This All Happen Below. Our Multi-Lingual Team Can Discuss Your Claims In Arabic, Assyrian, Turkish, Greek, Italian, French, Serbian, Croatian, Armenian, Mandarin, Hindi, Punjabi Or Malayalam.
Read Our Latest Articles, Case Studies Or Commonly Asked Questions Concerning Your Legal Claims And Compensation Law.
As you are no doubt aware, your superannuation fund is likely to represent a large part of your retirement income; it serves as a form of savings you build up over the entirety of your working life.
Over many years, your employer or employers pay into your fund, and that money is then invested into various financial vehicles to accrue even more value until you retire, at which point you will begin withdrawing from the fund.
However, what you may not fully understand is the ins and outs of what can happen to your superannuation fund if you were to pass away with money still left over. The following guide should help you get a handle on the financial future of your super fund and setting up your beneficiaries to claim your death benefit with ease.
You probably have a basic understanding of how your super works – your employer pays a certain percentage of your salary into it every year from when you start working to when you retire.
You probably also know something about how to begin withdrawing from this fund (either in part over time or as a lump sum).
But what you may not know is how the latter decision affects the ability to withdraw funds upon your death, and the impact that can have on how the money is taxed.
In addition, many Australians also have a life insurance policy through their super, which can offer a number of different layers of financial protection, including a death benefit, total and permanent disability coverage, and income protection insurance. Often, this coverage is applied automatically as part of your super.
However, you should keep in mind that TPD insurance – which can protect you in the event of permanent incapacity – will typically expire once you turn 65, and life coverage will often do the same when you turn 70.
Generally, you will only be able to claim your superannuation fund upon reaching your preservation date. There are some situations (including permanent incapacity that renders you unable to work) where you can claim some or all of these funds before that time, but these are uncommon, and for the purposes of this discussion, they will mostly be moot.
Once you have reached your preservation date (which is variable based on when you were born), you are eligible to begin withdrawing from your super regardless of whether you have retired from your job. And you have options for how you can get your super fund paid out, including:
The answer to this question can be a bit murky: Technically, if you choose to receive your super as a stream of income, you are turning it into a pension fund.
However, if you take your superannuation fund as a lump sum, that is not a pension.
Meanwhile, both are distinct from the Age Pension run by the Australian government, which provides additional payments to retired workers based on their financial need. In many cases, you may be eligible for the Age Pension in addition to the savings you have built up in your super fund.
If you die before your super is entirely paid out (that is, if you elect to receive it as an income stream rather than a lump sum transferred to a bank account you control), things can become somewhat complicated if you are not fully prepared.
You cannot, for example, put this money in your will, specifically, because you can only list assets you personally control. If you are receiving regular payouts from your super fund, the company still technically controls it even though it is your money.
For that reason, you will need to specify with that company who should be a beneficiary of your fund. If you don’t do so, the company will typically pay the balance of your fund out to your estate.
In addition, there are only certain people who can be listed as a beneficiary in the event of your death.
As mentioned above, if you pass away before your super’s life insurance provision expires, the death benefit from this type of coverage may be added to the amount paid out.
Australian tax law states that there are only certain people who can make a death benefit claim on your super. These include:
If none of the above are designated as beneficiaries of the death benefit, the balance of the super fund will be paid to the estate of the deceased as a lump sum.
There are a number of different relationships that would qualify as a spouse or de facto partner who could claim the death benefit from your super pension.
These include the obvious – the person to whom the deceased was married – but also the person who is in a registered relationship with the deceased, or even in a de facto relationship.
In some cases, this may apply to more than one person, at which point the trustee of the estate will make a decision about how to appropriately distribute the death benefit.
As noted above, you cannot include a super in your will if you have not chosen a lump sum distribution. That’s because your will can only include assets currently considered part of your estate, meaning that you own and control the asset.
If you are getting your super payments as an income stream, you do not control the fund itself, only the relatively small payouts from it.
However, if you take your super as a lump sum, then it’s likely just money in the bank for you, and you can include that money in your will.
The first thing you must do when trying to file a claim on a deceased person’s super fund is to determine how many super funds the deceased held, and which companies they were with.
Once you have that basic information, you can go about contacting the companies in question and lodging your claim. However, you will have to be able to provide proof that you are the listed beneficiary (or one of a number of beneficiaries) to successfully obtain these funds.
Often, these are paid to either dependents or the person or people nominated to be executors of the deceased’s estate.
If the deceased did not nominate specific beneficiaries, the company controlling the funds (that is, the trustee) will consider claims based on your relationship with the deceased at the time of their death.
To file a claim, regardless of status, you will need to notify the super fund of the death (with proof, such as the death certificate), request details of any nominated beneficiaries, and then fill out all requisite forms.
Typically, you will not have to pay anything to place a claim on a super’s death benefit, but if you believe you are unfairly denied access to funds that should be yours, you may have to hire a lawyer familiar with making this kind of claim. As you might imagine, there are typically going to be legal fees associated with doing so.
There is no simple answer to this question, because the taxable status of an inherited super fund depends on a number of factors.
First and foremost, this will depend on the size of the taxable component of the fund, as well as any potentially tax-free aspects of it. In addition, whether the beneficiary is considered a dependent or the deceased for tax purposes will affect the amount taken out.
As discussed above, only certain people can qualify as dependent for tax purposes, so your options here may be somewhat narrow.
Furthermore, if you elect to take the death benefit as a lump sum, the taxed element will likely be affected differently from if you were to elect to receive the benefit as an ongoing income stream. Each could affect your future financial situation, so it’s important to choose wisely.
Case Overview Our client suffered unimaginable loss following her 12-hour labour, delivering her first child by emergence caesarean. A few hours after our clients baby
Case Overview Our clients youngest son was born in 2002, following a serious car accident that left his parents with severe injuries. The accident caused
Case Overview Our client was born with Quadriplegic Dystonic Cerebral Palsy, which was caused by complications during delivery. During labour, our client’s mother was administered
Case Overview Our client is a survivor of historical abuse which dates back to 1988. Having been made a ward of the state at age
Case Overview We acted for a client who was involved in a serious motor vehicle accident. The other driver collided into the rear of our
Case Overview Our client, despite informing staff she felt dizzy after undergoing radiological investigations were carried out, was left on her own in a small
Your location is currently:
