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August 22, 2026 \u2014 1:07pm<\/p>\n
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Remove items from your saved list<\/a> to add more.<\/p>\n AAA<\/p>\n A father of three died with almost $100,000 in unspent superannuation. His three daughters, two of whom had been cut out of his will, wanted it split equally between them.<\/p>\n His middle daughter was ultimately paid the entire sum \u2013 even though his will suggested the cash should go to charity.<\/p>\n The case highlights difficulties faced by will-makers in ensuring that their unspent superannuation goes to their intended beneficiary. It also displays particular obstacles to leaving money to charity.<\/p>\n The decision to give the money to the middle daughter was made<\/a> by the Australian Financial Complaints Authority (AFCA), which handles complaints for most superannuation funds.<\/p>\n New research<\/a> by University of Sydney Law School Associate Professors Natalie Silver and Ben Chen reveals that the authority often departs from the wishes expressed by a will-maker when resolving complaints about the distribution of a deceased\u2019s superannuation.<\/p>\n The authors analysed 269 decisions by the authority and found that it distributed the super according to the will in 13 or 11.2 per cent of the 116 cases that discussed the will. The authority gives primacy to the interests of dependants, the authors say.<\/p>\n Super among Australians\u2019 chief assets<\/p>\n Silver and Chen argue that the law on distributing a deceased\u2019s superannuation is unduly complex, and say that changes would make it easier for the money to be left to charity.<\/p>\n \u201cTogether with the family home, superannuation is now the principal source of wealth for most working Australians,\u201d they write in a forthcoming Melbourne University Law Review paper.<\/p>\n Most Australians now die with the majority of wealth they had when they retired, including most of their super balance, according to a Treasury report<\/a> cited by the authors.<\/p>\n Australia\u2019s compulsory superannuation system provides \u201ca rich source of potential charitable bequests\u201d that could unlock billions, they say, helping the government to reach its aim of doubling philanthropic giving by 2030.<\/p>\n Super may not be covered by a will<\/p>\n Under the existing law, it is difficult for a will-maker to ensure who gets their superannuation when they die. This is because the pool of money is managed separately by a super fund trustee and does not automatically form part of a deceased\u2019s estate.<\/p>\n Chen said that the current situation was \u201cunnecessarily complex\u201d. Many of the problems would be resolved, he said, if there was a default rule that super funds should pay unspent superannuation to a deceased\u2019s \u201clegal personal representative\u201d, which is typically their executor.<\/p>\n The executor would then distribute the funds according to the will, including to any nominated charities.<\/p>\n AFCA\u2019s role<\/p>\n But super fund trustees are responsible for distributing the funds. They are not bound by the will and can only distribute the funds to a narrow group of people. AFCA handles complaints about how the funds are distributed, and in limited cases the Federal Court may hear an appeal.<\/p>\n The main way for a person to ensure that their intended beneficiary gets their unspent super is to sign a document called a binding death-benefit nomination, which must be followed by most super fund trustees.<\/p>\n The binding nominations have significant limitations. Unlike a will, they expire after three years, though there may be a way to set up a \u201cnon-lapsing\u201d nomination in some cases.<\/p>\n How charities are disadvantaged<\/p>\n In addition, only a small class of dependants, such as a spouse or child, or a deceased\u2019s executor or administrator, can be named as beneficiaries in binding nominations. Charities cannot be included, nor can many individuals.<\/p>\n \u201cThe definition of dependant is quite narrow,\u201d Silver said. It typically did not include parents, siblings or close friends.<\/p>\n The only way to direct the money to a charity is for a super fund member to name their executor or administrator in a binding nomination, and to include the charity separately in their will.<\/p>\n This two-stage process results in \u201cunnecessary cost and complexity … in making a charitable superannuation bequest\u201d, Silver and Chen say, and it disadvantages charities.<\/p>\n A tax applies when a charity receives superannuation through a deceased estate, which also acts as a disincentive. By contrast, when the money is paid to some dependants it is tax-free.<\/p>\n \u2018Not unique to charities\u2019<\/p>\n \u201cThe obstacles that we identify in the paper in relation to charities are not unique to charities,\u201d Chen said.<\/p>\n Restrictions on who can be named in a binding death-benefit nomination make it harder to leave the money to other beneficiaries, including many extended family members. The same two-step process would need to be followed.<\/p>\n The authors say that two changes would help ensure more people left their unspent super to charity: super fund members should be able to name a charity directly in binding death-benefit nominations, and bequests to charities from unspent super should not be taxed.<\/p>\n They argue the changes would be cost-effective to the government and could accommodate the interests of dependants and other family members.<\/p>\n The daughters\u2019 fight<\/p>\n In the case of the three daughters, the wishes of the father were far from clear.<\/p>\n He had lodged a nomination in April 2019, saying his middle daughter should be paid his unspent super in full. But that document was non-binding.<\/p>\n His will in October that year made more complex arrangements for this daughter that would have resulted in the super ultimately being paid to charity. He died months later, in 2020.<\/p>\n Related Article AFCA, resolving a complaint, found it was unfair and unreasonable not to pay the sum in full to the middle daughter. The authority gave primacy to the father\u2019s wishes in his non-binding nomination.<\/p>\n \u201cAlthough his wishes as expressed in his will are not to be ignored, they are not to be taken as determinative,\u201d it said.<\/p>\n Silver said current rules for distributing a deceased\u2019s unspent super were unworkable chiefly because the compulsory superannuation system had not been designed with inheritance in mind.<\/p>\n \u201cIt was designed to provide savings to be used as income during retirement,\u201d she said. \u201cBut the problem is that now a lot of Australians are dying with the majority of their superannuation still intact.\u201d<\/p>\n Be the first to know when major news happens. Sign up for breaking news alerts<\/a> on email or turn on notifications in the app.<\/p>\n Save<\/p>\n You have reached your maximum number of saved items.<\/p>\n![\"It](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/08\/fcffaf1738861bc0a8ae78550f334ceb7847e8bdcbe8fa864cc93ef0f60e9063.jpeg\")
It can be difficult for a will-maker to know where their unspent superannuation will end up.Matt Willis<\/p>\n![\"The](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/03\/1772855410_902_50855b2865a0411216de2f0caa6e642404381587834172bdd8919ac9442decf8.jpeg\")
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