Updated 22 October 2026
Wills - Potential Problem #24: Assuming All Assets Are Covered
In New South Wales, your will does not automatically control everything you leave behind. Superannuation is a particularly important example. Your account balance and any associated death insurance benefit are generally held within the superannuation system, where separate rules determine who receives payment after your death.
A will leaving “everything” to your children may therefore produce a different result from the one you expect. Effective estate planning means checking your will alongside each super fund’s nomination arrangements, insurance and ownership records. The aim is to identify how each asset will actually reach its intended recipient.
Why superannuation needs separate attention
Your super fund’s trustee administers the benefit under superannuation law and the fund’s governing rules. It must consider any valid nomination and the people legally eligible to receive payment. Simply identifying superannuation in your will does not create a binding instruction to the fund.
Moneysmart’s death benefit guide explains that the payment can include the account balance and insurance held inside super. Check both when estimating what your family may receive. A separate life insurance policy outside super must be examined under its own ownership and policy terms; it does not necessarily follow the super nomination.
Who can receive your super
Eligible recipients generally include your spouse or de facto partner, children of any age, someone financially dependent on you, or a person in a qualifying interdependency relationship. Your legal personal representative can also receive the benefit for your estate.
A parent, sibling, friend or grandchild is not automatically eligible merely because they are close family or named in your will. Their eligibility needs checking. If you want someone outside the permitted categories to benefit, payment through your estate may be appropriate.
Relationship changes also need attention. An old nomination should be reviewed after separation or divorce. Do not assume that changing your will automatically changes the fund’s records.
Binding and nonbinding death benefit nominations
A valid binding nomination requires the trustee to follow the direction, subject to the applicable law and fund rules. A nonbinding nomination records your preference but leaves the trustee with discretion. Check which type appears on your account.
Lapsing binding nominations commonly require renewal after three years. Some funds offer nonlapsing arrangements, and pension accounts may permit a reversionary beneficiary who continues receiving an eligible income stream. Moneysmart explains the different nominations. Availability and validity requirements vary, so follow the particular fund’s instructions.
Self-managed super funds need separate scrutiny. In Hill v Zuda (2022), the High Court held that regulation 6.17A, which contains particular nomination formalities and expiry requirements, does not apply to SMSFs. That does not make every SMSF nomination permanent or valid. The trust deed and applicable law still matter.
Nominating your legal personal representative
If your intention is for super to be distributed under your will, one option is a valid binding nomination to your legal personal representative, often shortened to LPR. In this context, that means the executor or administrator acting for your estate. It does not mean your solicitor personally.
Once the fund pays the benefit to the estate, the executor administers it under the will, subject to estate liabilities, tax and any relevant court orders. Without a valid will, intestacy rules govern distribution.
Use the fund’s nominated category and required wording. Naming your executor as an individual can have a different effect from nominating the office of legal personal representative. Update the will’s beneficiaries and substitute executors alongside the nomination.
Payment through the estate can support a testamentary trust or gifts to people who cannot receive super directly. However, it can introduce estate administration delays and exposure to estate liabilities or claims. It is a decision to assess against your circumstances, rather than a universal solution.
Suppose your will divides the estate equally between two children, but a valid binding super nomination directs the entire super benefit to one child. The will’s equal division does not automatically rebalance that separate payment. Review the overall result, including tax, rather than treating each document in isolation.
A real case about competing personal and estate interests
In McIntosh v McIntosh (2014), the Queensland Supreme Court considered a mother who administered her son’s estate after he died without a will. She was his nonbinding nominated beneficiary with three super funds and obtained payment of the death benefits personally.
She had not pursued payment to the estate. The court found that she had preferred her own interests over her duties as administrator and required her to account to the estate for the benefits she received.
This was a Queensland decision involving an intestate estate, rather than a NSW ruling that a will overrides super nominations. Its practical lesson is that estate representatives must address conflicts when they also seek superannuation personally. The fund’s payment process and the representative’s duties require separate consideration.
Receiving super is different from receiving it tax free
The tax definition of a death benefits dependant differs from the rules identifying who may receive super. An adult child can be an eligible recipient while not qualifying as a dependant for tax purposes.
The ATO’s superannuation death benefits guidance explains that tax depends on matters including the recipient’s status, the benefit’s components and whether payment is a lump sum or income stream. Lump sums paid to tax dependants are generally tax-free; taxable components paid to nondependants may attract tax.
Paying the benefit to your estate does not automatically remove that tax. Treatment depends on the beneficiaries who benefit from it. Consider the after-tax outcome before deciding how to divide assets between family members.
Claims and disputes need active attention
In its June 2026 review, ASIC examined reported progress by 45 superannuation trustees and reported a 10% increase in death benefit claims volumes over the 12 months to October 2025. These are industry service figures, not a measure of how often wills or nominations fail.
After a death, contact each fund and obtain its claim requirements. Keep copies of nominations, correspondence and supporting evidence. Where payment is disputed, seek advice promptly about the fund’s objection process and any available Australian Financial Complaints Authority review. Strict deadlines can apply.
Also avoid assuming that direct payment makes super immune from every estate dispute. NSW’s notional estate provisions can, in appropriate circumstances, bring a benefit paid outside the estate within a family provision claim. The Law Society of NSW’s superannuation FAQs explain this qualification.
Five steps to close the gaps
1. List every account and policy. Record each super fund, pension account and insurance policy, including old accounts you no longer contribute to.
2. Obtain the actual nomination. Check the recipient, nomination type, date, expiry and whether the fund received it. An account summary may not answer every question.
3. Match the nomination to your intentions. Check eligibility and compare direct payment with the LPR option. Consider tax and any trusts intended for children.
4. Complete the formalities. Use the correct form, satisfy witnessing and delivery requirements, and retain confirmation. Arrange renewal reminders where needed.
5. Review after changes. Revisit the plan after marriage, separation, a death, a new child, a fund transfer or retirement. Keep your executor informed about where records are stored.
Check the rest of your estate plan
Superannuation is only one possible gap. Jointly owned assets, company and trust interests, and insurance can follow different rules. Check legal ownership before assuming a will can distribute an asset.
CM Lawyers’ wills and estates team can help coordinate your will and nomination arrangements, with financial or tax advice where needed. If you are already managing a deceased estate, see our estate administration services or contact our Marrickville office. Bring your current will, fund statements and nomination documents so the review addresses the actual arrangements.
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