What happens to super when you die?
Your super balance plus any life insurance inside super is paid to your beneficiaries by the trustee — not the executor of your will. A binding death benefit nomination tells the trustee exactly who should receive it.
On death, super is paid as a death benefit by the fund trustee. It is not automatically part of your estate and is not controlled by your will unless you've nominated your legal personal representative.
Step by step
- Your executor or family notifies the super fund of your death
- The trustee checks your death benefit nomination
- If valid and binding → pays the nominated dependants directly
- If non-binding or missing → trustee exercises discretion (can take 6–12 months)
- If paid to the estate → distributed per your will
Insurance in super
Most default super accounts include life (death cover). When you die, the insurer pays the sum insured into your super account, and the trustee then pays the combined balance to beneficiaries. Check your annual statement for your current death cover amount.
Tax on the benefit
- Paid to a tax dependant (spouse, minor child): tax-free
- Paid to a non-tax-dependant (adult child, friend): taxable component up to 17%
- Insurance proceeds inside super may carry an additional “untaxed element” — seek advice
Sources
Related
General information only — not financial advice. Super decisions are long-term; verify with a licensed adviser.