Trusts & Super Death Benefits?
Yes, a testamentary trust can receive super death benefits.
If you die, your super fund trustee normally pays your death benefit to one or more of your dependents or to your estate. The trustee of your superannuation fund may have the final decision as to who gets your superannuation.
You may influence the result by completing a ‘death benefit nomination’ to one or more of your dependents and/or your legal personal representative. Your legal personal representative is the executor of your Will or the administrator of your estate.
If you nominate your legal personal representative in your binding death benefit nomination, your benefit will form part of your estate and be distributed in accordance with your Will (if you have one), or in accordance with the laws that govern people who die without a Will.
Most super funds let you nominate whom you want your death benefit paid to, either as a non-binding or binding nomination. A binding nomination leaves your super fund trustee with no choice as to who gets your death benefit. If you don't nominate someone, the super fund trustee will decide whom your money goes to.
It is important to seek independent taxation and/or financial advice regarding death benefit nominations as it all depends on your personal circumstances.
Should I make a binding super death benefit nomination?
It is critical that you seek professional financial and/or taxation advice before deciding whether to make a binding super death benefit nomination.
If you nominate your legal personal representative in your binding death benefit nomination, your benefit will form part of your estate and be distributed in accordance with your Will.
However, there may be complex tax implications which is why professional taxation advice is important before you make your decision.