• Ellison Moschella & Co

Is Your Superannuation Really Yours?

Not everyone realises a substantial part of “their assets” won’t automatically be included in their estate when they pass away. So what are these assets?

Examples include:

  • Superannuation;

  • Trusts;

  • Company assets; and

  • life insurance policies.


Whether you have an employer, industry or self managed fund all superannuation funds have one things in common; the money is held in trust. What does this mean? In simple terms, a trust means someone owning an asset for the benefit of another (i.e the beneficiary trusts the trustee to hold the assets for the beneficiaries benefit.) Superannuation assets don’t become totally yours until a certain event; typically referred to as the vesting date. Where the assets go at this time will depend upon the terms of the trust and your circumstances.

The normal vesting dates are either upon reaching retirement age or upon your death. If you retire then the funds will typically go to the retiree. This isn’t the case if you die before reaching retirement however. Here the funds will be paid according to the valid nomination in place as at the date of your death. If you don’t have a binding nomination the funds will be paid at the trustee’s discretion. There are different types of nominations including:

  • non-binding nomination;

  • binding nomination (which will normally last for 3 years);

  • binding non-lapsing nomination; and

  • financial agreements are contractual obligations to pay the funds in a particular manner.

To ensure your assets go to your estate you need to nominate your estate or personal representative as the nominated beneficiary of the fund. In saying this however you should also consider obtaining financial advice as the taxation consequences will depend upon whether the funds are taxable, exempt and who they are paid to. Taxable funds will only be exempt if they are paid to a financial dependant including a spouse or financially dependant child. Keep in mind the taxation laws on Superannuation benefits change from time to time.


Like superannuation funds, trust funds are held by the trustee on trust for another. Even if you are the trustee and a beneficiary of the trust the trust assets will not automatically flow into your estate unless you put in place steps to ensure this happens. It may be that the trust will continue as a separate pool of funds outside of your estate. Here you will need to consider who will control the trust and how it will be determined where the funds will go. Your solicitor should therefore review any trust you have to ensure those funds go to the people you want them to.

Company Assets

A company is a legal entity in its own right and therefore any assets it holds are separate to your estate. You should therefore consider who will control the company and whether the company needs to continue upon your death. Proper succession strategies should be put in place for any companies you have.

Life Insurance Policies

Life insurance Policies have a particular owner / beneficiary when they are created. You should review this to make sure that these match your estate planning goals.


If you don’t address these different types of assets there may be unforeseen problems. Only recently we had a matter where an older couple had thought they were financially secure due to a large superannuation fund which the husband had generated from working for an oil company all of his life. This was shattered when he passed away before retiring and the trustee of the fund deciding to only pay out 1/2 to the deceased’s wife and the other half to his two adult sons. Unfortunately for the wife her sons didn’t want to give up their early windfall and kept the money allocated to them for themselves. I’m sure their father wouldn’t have considered this as a possibility.

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