For most working Australians, superannuation is the second-biggest asset they own, after the family home. Yet it is also the asset people most often get wrong when planning their estate—because of one fact that catches almost everyone by surprise: your super does not automatically pass through your will.
You can have a perfectly drafted will leaving “everything to my children,” and your super can still end up somewhere else entirely. That is not a loophole or a mistake. It is how superannuation is designed to work. This guide explains why, walks through how death benefit nominations operate, flags the tax trap that quietly costs families thousands, and looks at two recent court decisions that show what happens when it goes wrong.
Why Super Sits Outside Your Will
Your superannuation is not legally yours in the way your bank account is. It is held in trust by the trustee of your super fund, for your benefit, under a set of rules. When you die, the trustee pays out a “death benefit” according to superannuation law and the fund’s trust deed—not according to your will.
Your will only controls assets that form part of your estate: your home (if solely owned), bank accounts, shares, personal possessions, and so on. Super only enters your estate if it is directed there. Otherwise, it is dealt with separately, by the trustee, based on your death benefit nomination.
This is why two documents that look like they should agree can completely contradict each other—and why your super needs its own plan.
How ezylegal helps: When we prepare your estate plan, we look at your super alongside your will, not in isolation. Our intake assistant, Rachel Z, asks about your fund and any existing nomination so nothing falls through the gap between the two. Start a free chat now.
Who Can Legally Receive Your Super
Superannuation law limits who your death benefit can be paid to. A trustee can only pay it to a “SIS dependant” (named after the Superannuation Industry (Supervision) Act 1993) or to your estate. Eligible recipients are:
- Your spouse, including a de facto or same-sex partner;
- Your child of any age (including adopted and stepchildren);
- A person in an interdependency relationship with you (living together, with a close personal relationship and mutual financial and domestic support);
- A person who was financially dependent on you; or
- Your legal personal representative—that is, your estate.
If you want your super to benefit someone outside these categories (a sibling, a parent, a friend, or a charity), you generally cannot nominate them directly. You direct the benefit to your estate and then distribute it through your will.
The Three Types of Nomination
How your death benefit is paid depends on the nomination you have in place with your fund. There are three main scenarios:
1. Binding Death Benefit Nomination (BDBN)
A valid binding nomination legally compels the trustee to pay your benefit to the beneficiary (or estate) you have named, as long as they are eligible. This is the option that gives you the most certainty. The catch: binding nominations usually have strict validity rules—correct form, two witnesses, eligible beneficiaries—and in many funds they lapse after three years unless renewed. A lapsed BDBN reverts to trustee discretion.
2. Non-Binding Death Benefit Nomination
A non-binding nomination is only an expression of your wishes. The trustee will consider it, but it is not obligated to follow it. The trustee makes the final decision about who receives the benefit, weighing up your dependants’ circumstances. This is where disputes most often arise—because the trustee can, lawfully, pay someone other than the person you nominated.
3. No Nomination at All
If you have no valid nomination, the trustee decides entirely at its discretion who among your eligible dependants receives the benefit, and in what shares. Your family has no guaranteed say.
How ezylegal helps: We help you put a valid, current binding nomination in place and diarise its renewal so it never silently lapses. A nomination that has expired is one of the most common—and most avoidable—causes of super ending up in the wrong hands. See our fixed fees.
The Tax Trap: Your Adult Children Could Lose 17%
Australia famously has no inheritance or death tax. But superannuation death benefits are an important exception that catches many families off guard.
The rule turns on a distinction between two definitions of “dependant”:
- Who can be paid your super (the SIS Act list above—broad, includes adult children).
- Who can receive it tax-free (the tax law definition of a “death benefit dependant”—narrower).
The critical gap is the adult child. An independent adult child can receive your super, but for tax purposes they are not a death benefit dependant. So if the taxable component of your super is paid to a financially independent adult child, it is taxed at:
- Up to 17% on the taxed element (15% plus the 2% Medicare levy); and
- Up to 32% on any untaxed element (30% plus Medicare).
The tax-free component is always tax-free, and a spouse or a child under 18 generally receives the whole benefit tax-free. But for a typical adult child inheriting a parent’s super, that 17% can mean tens of thousands of dollars lost to tax that, with planning, might have been reduced.
How ezylegal helps: There are legitimate strategies to reduce this—such as how the benefit is structured and whether it flows through your estate—but they need to be set up before death. We flag the tax exposure during your estate plan so your family isn’t blindsided. Learn about our wills and estates service.
What the Courts Have Decided
Two recent cases show why nominations and relationship facts matter so much.
Lynn v Australian Financial Complaints Authority [2025] FCA 175
Mr Lynn, an AustralianSuper member, made a non-binding nomination leaving his death benefit to his six adult children. After he died, the trustee paid the entire benefit to his estranged wife. One of his daughters complained to the Australian Financial Complaints Authority (AFCA), which decided the benefit should instead be split 50% to the spouse and 50% among the six children, given the couple’s separation, mutual restraining orders, and pending divorce. The Federal Court upheld that outcome in 2025.
The lesson: a non-binding nomination is no guarantee. Despite naming his children, Mr Lynn’s wishes were overridden, and his family had to fight through a complaint and a court case to get a different result. A valid binding nomination would have given certainty.
Nguyen v Australian Financial Complaints Authority [2024] FCAFC 77
Mr Corbisiero nominated his de facto partner, Mr Nguyen, to receive a death benefit of over $1.1 million. On the morning of his death, the deceased sent a message—to his sister—indicating Mr Nguyen should receive nothing. The Full Court of the Federal Court held that the de facto relationship had not ended, because a relationship does not terminate merely because one person privately forms an intention to end it; that intention must be communicated to the other partner or acted on. Mr Nguyen remained an eligible “spouse” and kept the benefit.
The lesson: eligibility turns on the facts of the relationship at the date of death, not on a last-minute change of heart that was never acted on. These questions are decided by trustees and courts after you are gone—so the documentation you leave behind matters enormously.
How to Get It Right
- Find out what nomination you currently have. Log in to your fund or call them. Many people discover they have no nomination, or one that lapsed years ago.
- Decide between a person and your estate. Paying a spouse directly is usually simplest. Directing super to your estate gives you more control (and lets you provide for non-dependants through your will) but can change the tax and exposes it to estate claims.
- Use a valid binding nomination where you want certainty—and diarise its renewal if your fund’s nominations lapse.
- Coordinate it with your will. Your super plan and your will should tell one consistent story.
- Get advice if there’s any complexity—a blended family, a self-managed super fund, a large balance, or a vulnerable beneficiary.
How ezylegal helps: We make sure your nomination and your will work together, that your binding nomination is valid and current, and that you understand the tax consequences before you sign. It’s all done at a transparent fixed fee—no hourly billing. Start your estate plan now.
Don’t have a will yet? A death benefit nomination handles your super, but everything else still needs a valid will. For a straightforward estate, our sister site ezyWill lets you create one online in about 15 minutes from $99/year. For a blended family or a larger estate, ezylegal’s lawyers can handle the will and the super strategy together.
Frequently Asked Questions
Does my super automatically go to the people named in my will?
No. Super does not automatically form part of your estate. It is paid by the trustee according to superannuation law and your death benefit nomination—not your will—unless you specifically direct it to your estate.
How do I make my super go to my estate?
You nominate your legal personal representative (your estate) as the beneficiary, ideally through a valid binding nomination. The benefit is then paid into your estate and distributed according to your will. This gives you control but exposes the benefit to any claims against the estate.
Do binding nominations expire?
In many funds, yes—a binding nomination commonly lapses after three years unless you renew it. Some funds offer non-lapsing binding nominations. Check your fund’s rules, because a lapsed nomination reverts to the trustee’s discretion.
Will my spouse pay tax on my super?
Generally no. A spouse (including a de facto partner) is a death benefit dependant for tax purposes and usually receives the benefit tax-free, whether as a lump sum or, in some cases, an income stream.
My children are adults—how do I reduce the tax they’ll pay?
Options include directing super through your estate, structuring the components of your benefit during your lifetime, or other strategies that must be set up before death. The right approach depends on your circumstances, so get tailored advice rather than assuming a one-size-fits-all answer.
What happens if I have no nomination?
The trustee decides, at its discretion, which of your eligible dependants receives the benefit and in what shares. Your family has no guaranteed say, and disputes are common.
Don’t Leave Your Biggest Asset to Chance
Your super may be worth more than everything else in your will combined. It deserves its own plan—not an assumption that “the will covers it,” because it doesn’t.
- Start a Chat: Tell Rachel Z about your super and your family in a few minutes.
- Get a Strategy: Our lawyers review your nomination, your will, and the tax position together.
- We Handle the Rest: We prepare a valid nomination and coordinate it with your will at a fixed fee.
No billable hours. No surprises. No assets falling through the gap.
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