Superannuation is often overlooked until it’s too late, and one gap in particular affects the vast majority of Australians. An estimated 15.5 million people have not made a binding death benefit nomination, according to a recent report on ABC News. What may come as a shock is that without one, a super fund can decide who inherits your accumulated super and any insurance, even if you have a Will.

The figure reflects a wide misconception that estate planning in Australia means having a Will only. Yes, a Will is part of it, but without holistic inheritance planning, many Australians are being left at risk.

We are currently in the early stages of what is being referred to as the ‘Great Wealth Transfer’, with research from the Productivity Commission suggesting 3.5 to 5.4 trillion dollars will pass between generations over the next few decades, largely from Baby Boomers to Gen X and Millennials.

With so much at stake, protecting your family with a binding death benefit nomination is vital.

What a Will actually covers, and what it doesn’t

Most people assume that a Will covers all of your assets (financial and physical) and that superannuation automatically passes to your beneficiaries.

In fact, superannuation and your Will operate distinctly. A Will includes assets owned in the deceased person’s name. It generally excludes superannuation, any jointly held property and assets held in a family trust.

Until your full superannuation is released, it is considered to be held by a trustee (the fund). It is not viewed as a personal asset until it enters your account. So, for that reason, it doesn’t automatically form part of a deceased estate.

The superannuation gap

Superannuation remains the largest asset for many Australians, and to protect it, it’s also important to understand the difference between binding and non-binding nominations.

A death benefit nomination becomes ‘binding’ when you have a signed and witnessed form. With a binding death benefit nomination, you can nominate who gets your super, and a trustee must follow it. Binding nominations can only be made to a dependant (a spouse, child, financial dependant or someone in an interdependency relationship) or to the estate. Nominations to anyone outside these categories are invalid.

A non-binding (unsigned form) exists as a guide, but a trustee is not legally obliged to follow it.

The other key point is that many binding nominations expire every three years – and are simply forgotten. A lapsed or missing nomination hands the decision back to your fund.

Where trusts fit in

While assets in a discretionary trust are typically excluded from a Will, it may be possible to protect family assets with a testamentary trust.

It’s a type of succession structure created inside a Will that comes into effect only after death. Any assets inside the testamentary trust are transferred to a trustee to distribute to the beneficiaries, or to manage for their benefit according to instructions. Distinct from a Will, it’s a longer-term structure designed to optimise tax planning and asset protection.

With the 2026 Federal Budget proposing a 30 per cent minimum tax on discretionary trusts from 1 July 2028, we are seeing renewed interest in this type of structure, which appears to be excluded from the new tax measures.

The family conversation

A binding death benefit nomination is an important part of your superannuation strategy, but documents alone may not prevent family disputes.

With family legal disputes often eroding hard-earned generational wealth, what’s essential is an early conversation about your wishes, and plans.

At Newealth, we provide holistic financial planning that brings together your superannuation and investment strategies, estate planning, investment strategies, tax optimisation and insurance – so you can rest easy that your family is protected.

For a confidential discussion at any time, please contact us.

General Advice Warning:

The information in this blog is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider whether the information is appropriate for you and seek professional advice before making any financial decisions.
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