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For many Australians, superannuation is one of the biggest assets they will leave behind, but when someone dies, where that money goes isn’t always as straightforward as people expect.

Without the correct arrangements in place, trustees may have discretion over who receives the benefits, potentially creating delays, disputes or unintended outcomes.

Xara Coassin, who is an estate planning senior associate at Attwood Marshall Lawyers, says that a valid binding death benefit nomination can provide greater certainty; however, mistakes can make even a cautiously prepared nomination ineffective.

A case surrounding Hill v Zuda in 2022 reinforced the importance of getting superannuation death benefit nominations right, showing that an SMSF’s binding death benefit nomination can last indefinitely, but also highlighting that a fund’s trust deed remains integral.

Making sure superannuation goes to where you intend

When it comes to superannuation, having a clear plan for who receives the money after death can help avoid uncertainty and disputes.

Coassin highlighted why a valid binding death benefit nomination can be necessary, and why members should double-check that their nomination has been properly completed.

“Whether it’s an industry fund or an SMSF, super is held in a trust, so that means that it’s managed by trustees on behalf of its members,” Coassin said.

“If there is no direction given to the trustees, then when a person dies, when a member dies, the trustees actually retain discretion on who will receive those super benefits.

“So there is a way to ensure that it does go to who you want, and that is by putting in place a valid binding death benefit nomination.”

Coassin indicated that the process changes whether it is an SMSF or industry fund, noting that it can be strenuous to follow the instructions from an industry fund.

“The process is different depending on whether it's self-managed or, with an industry fund, you’d go directly to the fund and ask for the form,” Coassin said.

“Every fund is different, so it usually is that they fill it out in front of two witnesses, post it back, and we suggest that they should also check that they have received it and it’s valid, because it might be that they’ve filled it out incorrectly and they’ve not accepted it, but they don’t often tell the member. So it’s a good idea to also follow it up as well.”

Estate v beneficiary

Where superannuation is paid can have significant implications for how the benefit is dealt with after death.

Coassin recognised the major differences between paying super directly to an eligible beneficiary and directing it to the estate.

“If it’s going direct to a beneficiary, it can only go to certain beneficiaries; so that’s usually a spouse, a child, a dependent, or someone that they’re in an interdependent relationship with,” Coassin said.

“If it’s direct to the beneficiary, probate is not required, so there’s no need to wait for probate to be completed.

“If there is a valid binding death benefit nomination in place, then that can be quite quick, although again that depends on that super fund.”

When superannuation is directed to the estate instead, providing more flexibility in how the funds are distributed, but it also means the estate will generally need to go through probate.

“They can also have a binding nomination that directs it to the legal personal representative, which goes into the estate,” Coassin said.

“The downfall is obviously that probate is required, but there is a lot more flexibility when it comes to the estate.

“We can also allow for contingency, so in the binding death benefit nomination, direct beneficiary, if that beneficiary dies and they have children, if we put it in the will, we can allow for those contingencies.”

Common mistakes with superannuation

Even where someone has taken steps to nominate a beneficiary, Coassin highlighted that there are several ways the nomination can become invalid.

“Number one would be not putting a binding death benefit nomination in place in the first place. Having an invalid nomination in place,” Coassin said.

“What can make a nomination invalid is not putting it in place in accordance with the rules, and this is probably more relevant when it comes to self-managed super funds.

“Sometimes it says you need to have two witnesses or one witness, or it can’t be non-lapsing.”

“And the others would be nominating a person not permitted to receive superannuation.

“If I’ve seen it, that they filled out the form with their brother, with their sister or friend, and they’ve not realised, and the super fund doesn’t actually tell them that that’s not a valid person.”

By: Matthew Taylor | 01 October 2026 | accountantsdaily.com.au