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What happens to super when someone dies?

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Do you know how to claim superannuation when a member of the family passes away? To avoid complications, read on and speak to a financial adviser.

Where can you find nearly $2 trillion in assets? In our super funds. While the Association for Superannuation Funds of Australia notes that this figure (from March 2016) is a slight decrease on the year before, we clearly still have a lot of money tied up in this nest egg.

However, it often happens that super funds get lost in red tape when someone passes away. We're here to provide financial advice on how you can get this money back from the superannuation provider.

How does super get lost when someone dies?

There are many ways superannuation can go walkabout, so to speak. In fact, there are 1.3 million lost super accounts with $13.5 billion in unclaimed money.

superannuation

Employers may shift a fund to another superannuation provider, making it difficult for you to access the fund of a deceased parent or family member. There may be complications with the super beneficiary appointed by the fund's owner, or a conflict between two people claiming it.

A simple change of address without updated details can result in lost super.

If there is a non-binding nominee to receive super death benefits, the trustee in charge of the fund may also encounter multiple parties claiming super.

Finally, even if superannuation benefits can be passed directly down to you, it is a process that can take months and requires a lot of paperwork.

So in any of these cases, how do you access the super of a deceased family member?

Take the first step

Find the right financial advice

The first thing you should do regarding this fund is, when a family member dies, contact their superannuation provider. They can then advise you on the process of claiming the super, including relevant documentation and the next steps you have to take.

In more complicated cases, the services of a financial adviser might be necessary. They can find lost super, work with a trustee on your behalf, establish if life insurance payouts are also included in the super benefits, and clarify any discrepancies between dependents set to receive the money. 

If you are still working out your retirement planning and want to ensure this doesn't happen for your loved ones, the right financial planning will go a long way. Speak to a financial adviser about estate planning, setting up clear guidelines for who will receive the super benefits, or perhaps establish a binding nominee to receive the money.

There is a lot that can go wrong with the transfer of super, which is why it's so important to be organised. Get in touch with Yellow Brick Road if you have any questions about accessing superannuation.

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