Quadrant Financial Planning Wodonga

How your estate will be distributed after your death will depend on who you nominate to be beneficiaries in your Will and for your superannuation. Learn more.



What is a beneficiary and why you need one for your super
The assets that make up your estate may include property, bank accounts, investments and superannuation.
How your estate will be distributed after your death will depend on who you nominate to be beneficiaries in your Will. That is, your estate minus your superannuation – unless you have specifically nominated your estate to be the beneficiary of your superannuation.
In that case, your Will can determine how your estate will be split.
But if you haven’t nominated a beneficiary for your super then it will be up to the superannuation trustee to determine where your superannuation will be paid and who will benefit.
Who can be a superannuation beneficiary
There are rules about who you can nominate to be your superannuation beneficiary.
A beneficiary can only be a dependant or personal legal representative – the person appointed as executor or administrator of your estate or a mix of these.
A dependant may include:
• your spouse (including a de facto spouse)
• your children (regardless of age)
• someone financially dependent on you (fully or partially)
• someone you had an interdependent relationship with.
An ‘interdependent’ relationship is a close personal relationship with someone you probably live with where you provide financial support to the other and where one of you provides domestic support and personal care to the other.
What are binding nominations, non binding, reversionary beneficiaries
To ensure your superannuation reaches the right people after your death you will need to have nominated a beneficiary.
There are two types of nominations – binding, which is legally binding, which the Trustee must follow, or non binding which isn’t legally binding but provides the Trustee with directions on how you would like your benefit to be paid.
If you select a binding nomination, you should also ensure that either you update this every three years or that you make it a non lapsing nomination.
Non binding nominations may be followed by the Trustee according to your wishes but ultimately is left to the Trustee’s discretion.
If you are receiving an income stream or annuity from your super and you have not nominated a reversionary beneficiary, the payment will cease on your death and the remaining balance or lump sum value will be distributed to your beneficiaries, in line with your binding nomination.
You may choose to allow your beneficiary to continue the pension or annuity – providing they meet an eligibility test, similar to a superannuation beneficiary.

Why is it important that you nominate someone
It’s important that you nominate someone as your beneficiary as your superannuation is not automatically counted as part of your estate. There have been cases where a person’s Will allocates the estate according to their wishes but because they have not named a specific beneficiary with their super fund, someone has made a claim on the person’s super – for example, an estranged spouse. The Trustee will have final say on how it is allocated so you should make your wishes known.
It is also important to consider the tax implications of who to name as your beneficiary if it is not one of the people listed above. If you are leaving your estate to various beneficiaries, a financial planner can explain the implications of the way you divide your assets including your superannuation.
Why you should review your beneficiary regularly
Like all your legal and financial matters, you should review regularly to make sure you are still in the same situation as you were when you last checked these.
In the last three years, have you married, divorced, had children or lost relatives? If you have done any of these things it is likely you will need to change your beneficiaries for your Will, your superannuation and even your insurance.
Once again, your Will does not automatically include your superannuation beneficiary – so make sure that you update both when there are any changes and review regularly.

Source: Money & Life

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Money isn’t everything but it helps when it comes to making choices. Growing your super balance faster can give you more choices in retirement and peace of mind right now. Get on the fast track to more super.



How to help your super grow faster
Super is money from your employer and your own savings you can use when you retire. As you earn an income it keeps growing a little at a time. But if you want to set yourself up for more choice for your life in retirement, there are two ways to help your super savings grow faster.
Super booster #1: save more
When you earn income, your super gets paid by your employer as a percentage of your salary. That’s something they are legally required to do and that’s why it’s called the superannuation guarantee. But your super savings don’t have to be limited by what you earn. You can make personal payments into super and there are a few different ways to do this.
Super booster #2: invest smart
Choosing how to invest your super is another step towards helping your savings grow. When you join a super fund, if you don’t choose how to invest your super, any savings you already have, and any new payments into your account, will be invested in a standardised investment option, known as MySuper. This might be ideal for your life stage and the type of investments you feel comfortable with. But most super funds offer a whole range of investment options and there might be one that is a more appropriate choice for getting the most from your super savings or if you want to play a more active role in your investment decisions.
Get motivated to save
Saving a little extra in your super now can make a big difference to your future income. But this can be hard to get your head around when it’s money you won’t get to spend until you retire. Here are four things to think about when it comes to saving as a way to grow your super:
• Super is your money
It’s important to think of super as part of your net worth, just like any other savings account or the $50 note in your hand. Finding out how much super you actually have is a good way to remind yourself that it has real value, even though you usually need to wait until retirement to access your super.
• Even small savings count
Another way to get motivated to save is to look at the difference your extra savings can make in 30, 20 or even 10 years’ time. See how a head start can help you reach your super goal and find out more about the big changes small savings can make for your super.
• Super isn’t everything
Choosing to save more super can be hard if you feel like you’re struggling to make ends meet or you’re saving for something that’s really important, here and now. So you need to think about your other money priorities before choosing to make extra payments into your super.
• Extra super can save on your tax
Making extra payments into super up to a certain amount each year could actually see you pay less in tax. So you get to put more money into retirement savings.
Get educated to invest
When it comes to investing super, knowing how to choose between all the options is a major hurdle to get over. And there are a lot of different things to consider when you’re investing your super, from the time it will be invested to the amount of risk you’re comfortable with or what is suitable for your life stage.
Take a closer look
Cass starts saving an extra $100 each month from age 25. Her friend Sunita starts her extra savings into super from 45. If the two friends earn the same throughout their career and keep saving at the same rate, Cass will have a super balance of $560,488 and Sunita will have a super balance of $521,198. Cass will have a super balance that’s $39,290 higher when they both retire at age 65.
Choosing to save a little more into super now will see your money grow much more over time. And thanks to the magical multiplying effect of compounding interest, every extra dollar added to your super savings is another dollar that can earn even more towards your final balance.
The interest or investment returns your super is earning are also going to be reinvested and earn more for your super. As this example shows, a 20 year head start on saving extra into super has earned Cass an additional $15,290 in investment earnings form her super savings up to age 65. Around 60% of her extra balance at retirement comes from her savings and around 40% comes from the earnings on those savings.

Source: MLC