Superannuation in Australia is a scheme for saving for retirement. Superannuation is also known as Super. The employer has to pay the money to a super fund so the employees are financially supported even after retirement. You can get your superannuation and estate planning benefits in Moonee Ponds from various financial service firms if you reside there.
How Superannuation Works
Most employers provide various retirement benefits to their employees due to retaining employees for a longer period. Retirement benefits of super include National Pension System, provident fund, etc. Unfortunately, many employees ignore the benefit as they don’t pay for the benefit’s contribution.
If you are an Australian citizen and age 18 or more, working more than 30 hours a week and earning more than AUD 450 per month, the super fund becomes pretty necessary for you. Your employer has to pay 9.5% of your salary into your super fund. If you are eligible for the super benefits, make yourself and employer aware of it if they aren’t already.
What Happens to Superannuation Estate Planning After Your Death?
Having an estate plan is important if you have assets. Your plan will help your heir understand when and how your assets will be distributed after you die. Estate plans are a bit complicated for a new person, trying to understand how it works. But after you understand a few things it won’t be so tough to understand. Let’s have a look at what happens to superannuation in estate planning after somebody dies.
The Federal Court of Australia states, “Superannuation is not an asset of the estate and a trustee is not bound to follow the directions of a will. Even if superannuation is specifically mentioned in a will, it does not make it an asset subject to the terms of the will.”
So in short, the legislation surrounding superannuation states that death benefits should be paid to the member’s spouse, children, or other legal dependents. Superannuation can also be paid to a legal personal representative. Superannuation death benefits are not a part of the demise’s estate.
What Happens to The Estate Tax?
Before knowing the estate tax system, it is important to know who or what is a non-independent individual because they will play a crucial role in the death benefits. Your children aged 18 or over who can’t prove that they were financially dependent on you before your death are considered as non-independents. The non-independents still can receive a death benefit from your superannuation fund but they have to pay a certain tax for it. Consult with a tax accountant Moonee Ponds services to get a better understanding.
If you marry or divorce, have children or a sudden death happens in a family, you need to do your estate planning carefully and make important changes. You may want to change your children’s age, the structure of your family, or even make a commencement of your pension. Changing your estate plan requires matching your personal situation with current estate law. Think of how a certain event in your life can change things for you and your family and according to that make necessary changes to your estate planning.