No one loves talking about death, but here’s an important question that most people get wrong:
What actually happens to your super when you die?
Most assume it goes to whoever’s named in their Will. But it doesn’t.
Superannuation sits outside your estate. It’s held in your SMSF, and unless you’ve given the trustee a legally binding direction, they decide who receives it — and how. That could mean a very different outcome to what you intended.
BDBNs Are OK — But They’re Not Foolproof
When we set up your SMSF, we helped you put a Binding Death Benefit Nomination (BDBN) in place — and if it’s one of our SMSF deeds, that’s a strong foundation. But even the best BDBNs come with risks.
Here’s why:
Most BDBNs expire every three years. We help you renew them — but it’s still a task you have to keep track of.
If not signed or witnessed correctly, the trustee isn’t bound to follow your wishes.
If the BDBN fails, your super could:
Be paid to a second spouse or stepchildren instead of your kids
Land in someone’s personal bank account — and be exposed to divorce, creditors or legal action
Trigger unnecessary tax or Centrelink issues
Cause family disputes or end up in court
That’s why we’ve developed a smarter, more secure option.
A Better Solution: SMSF Will with Testamentary Trust
We now offer a tailored SMSF Will, built into your fund’s deed, with the option to direct your super into a Testamentary Trust (also known as a Death Benefit Trust).
This gives you greater protection and more flexibility than a standard BDBN — and it never expires.
With an SMSF Will and Testamentary Trust in place, you can:
Lock in exactly who receives what — no trustee discretion
Allocate specific assets (e.g. “the property to Alex, the shares to Mia”)
Direct your super to your estate — where it’s managed by your Will and Testamentary Trust
Protect your super from divorce, bankruptcy, or in-law claims
Keep wealth in the bloodline, not with ex-partners or outsiders
Distribute income tax-effectively to your children or grandchildren
This structure is ideal for blended families, business owners, young or vulnerable beneficiaries, and anyone who wants certainty, control and legacy protection. If you’d like to hear Cass explain these benefits, watch this video from around the 21 min mark.
And the best part? The SMSF pays for it. It’s a fund expense — not a personal one — so there’s no out-of-pocket cost to you.
Real Story: Why This Matters
Kylie’s BDBN had quietly expired. When she passed away, the trustee used their discretion — and everything went to her new partner. Her adult children were left out.
If Kylie had an SMSF Will in place, her wishes would have been followed, and her children protected.
Want to know more?
Book a free SMSF Will check-up with Cass (select Wills, Estate Planning & Asset Protection)
Your super is too valuable to leave to chance. Let’s make sure it lands exactly where you want it to.