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Superannuation and Your Legacy

by | Fri, Mar 22 2024

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Having a written legal will is important, yet more than half of Australian adults don’t have one. To provide you with an easier and more affordable way to write or update your will, Vision has partnered with Safewill, a leading online will writing platform.

Ever wondered what happens to your things when you die? Christians often focus more on our souls, but having a written will is vital. It provides for loved ones and organisations, while also preventing court-led asset distribution in the absence of a will.

According to Alex Cook from Wealth With Purpose, many people are unaware of a crucial distinction that exists in the distribution of our superannuation. Super is considered a non-estate asset, meaning that it falls outside the coverage of a will.

Non-Estate Assets

Alex is a successful financial planner whose ministry equips Christians to honour God with their finances by teaching sound financial skills. He recently joined us on 20Twenty to share his thoughts on the importance understanding superannuation laws.

‘It’s very important that you complete a beneficiary nomination with your super fund,’ says Alex. ‘There are two different sets of laws that apply to superannuation when somebody passes away. The first requires that superannuation is passed on to someone who is a beneficiary. That’s either a spouse or a child.’

The child’s age doesn’t matter, but another set of laws will then be applied, and that is tax laws. So, if a spouse or child inherits your super, they’ll pay tax on it based on their age.

Beneficiary Nomination

‘For example, a 30-year-old child is not really a dependent anymore,’ says Alex. ‘They will pay tax on your superannuation, whereas your spouse will not. So that may actually influence who you are going to leave your superannuation to.’

If you don’t have kids or someone specific to leave it to, you can nominate an organisation instead. While superannuation law doesn’t allow direct donations to organisations, you can use the beneficiary nomination on your super fund.

This lets you leave it to your estate (referred to as a legal personal representative) through your will, allowing you to leave it to the organisation you choose. It’s crucial to understand these rules to make the right decisions.

‘It’s not complex,’ says Alex, ‘but it is important that people know what those rules are.’

Safewill Free Wills Week is running from the 18th – 24th March 2024! For more information on creating your free will, click here, and listen to Alex’s full interview on 20Twenty below: