Death, Taxes and Superannuation

For most Australian residents, and the Australian expats planning to retire down under, superannuation will in many cases be one of the most tax efficient ways to save for and provide your retirement income. Providing your superannuation is managed appropriately and you receive the right advice, it can offer significant tax and estate planning benefits.

A question we are often asked by our Aussie expat clients is who will get their superannuation in the event that they pass away. Many assume that it will simply be dealt with based on the instructions in their Will, or simply that their family will take care of it, however are completely unaware of the potential tax consequences. It’s important to recognise that you can bind the Trustee of your superannuation fund to pay out your superannuation to your nominated beneficiaries.

Let’s start with the basics

A Binding Death Benefit Nomination allows you to have your say about where your superannuation proceeds are paid in the event of your death. This allows you to ensure that it’s paid to who you want after your death, rather than leaving this to the discretion of the trustees of your super fund. This can also speed up the process, ensuring that your estate planning is taken care of and precisely as you wish.

On your superannuation statement, you will see the ‘Death Benefit’, which includes your superannuation proceeds as well as any insurance benefits from life cover that would be paid in the event of your death. Your Binding Nomination therefore outlines clearly who you would like your superannuation and insurance proceeds to be paid to.

Who can you nominate?

It’s important to recognise that under the SIS Act you can place a binding nomination in place for your Dependants only. Under the superannuation law, this includes your partner (including de facto or same-sex partners) as well as your children (including step-children and adopted children). The Trustee of your superannuation fund will review the nomination and consider if the person receiving the funds has been wholly or partially dependent on you financially prior to your death.

You can decide that you wish to split the nomination, i.e. provide a certain percentage to your surviving spouse and a certain amount to your children, both of whom could be considered financial dependants.

How long will the binding nomination last?

Many superannuation funds will only allow your Binding Death Benefit Nomination to last for 3 years, after which it will expire and will require updating by you. There are now a few superannuation funds that are allowing Non-Lapsing Death Benefit Nominations, which means that you won’t need to remember to update these every 3 years. It is important however to review your nominations and ensure that they reflect your current wishes.

If your nomination did lapse following the 3 year time period, then it will generally become non-binding which gives your superannuation fund’s Trustee greater control over who receive your super funds. This means that they can decide to distribute your superannuation and insurance proceeds to your financial dependants and your estate in any way they believe to be fair and reasonable. This also highlights the important of ensuring that your Will is up to date, valid, and reflective of your current wishes.

Do all funds allow for nominations?

Surprisingly, no. Not all superannuation funds will allow its members to make binding or non-binding nominations with regard to where they would like their superannuation to be paid, and it will be at the discretion of the funds’ trustees. If this is the case for your superannuation, I would recommend that you consult your Adviser and tax consultant to ensure that you have the right estate planning tools in place or even to consider switching to a more appropriate superannuation fund.

Are their tax implications for my super proceeds?

In short, yes there can be significant tax implications depending on who receives your superannuation proceeds. This is generally dictated by whether the beneficiary of your superannuation proceeds is considered a Tax Dependant or not, which is similar to the definition of a superannuation dependant, however does not include adult children above the age of 18. I recommend that you seek professional advice for your superannuation death benefit nominations to ensure that you’re fully informed of any potential tax implications of your estate planning.


To your financial success!


Jarrad Brown is an Australian-trained and qualified Fee-Based Financial Planner with Australian Expatriate Group of Global Financial Consultants Pte Ltd providing specialist financial advice and portfolio management services to Australian professionals in Singapore. Jarrad Brown is an Authorised Representative of Global Financial Consultants Pte Ltd – No: 200305462G | MAS License No: FA100035-3

Australian Expatriate Group is a division of Global Financial Consultants in Singapore providing specialist advice to Australians living abroad.

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General Information Only: The information on this site is of a general nature only. It does not take into account your individual financial situation, objectives or needs. You should consider your own financial position and requirements before making a decision.

*Please note that Jarrad Brown is not a tax agent or accountant and none of the content outlined here should be taken as personal advice. You should consult your tax agent and financial adviser to review your current personal finances and financial goals to consider whether this strategy is appropriate for you.


Jarrad Brown is the trusted fee-based financial adviser in Singapore working with professional expats in the region. An Australian qualified and experienced Financial Adviser, Jarrad provides specialist advice to Australian expats as well as other nationalities.

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