Your Superannuation Has No Idea What Your Will Says

You could spend months getting your will exactly right. Name every beneficiary. Split the estate down to the last dollar. And your superannuation, quite possibly the largest thing you own, might never open the document.

That’s not a technicality. It’s the law. Superannuation sits inside a trust, governed by a trust deed and superannuation legislation, not by the Wills Act. When you die, the trustee of your fund decides where your super goes. Not your executor. Not the terms of your will, unless you’ve told the trustee something different in writing.

For most Australians, super is now worth more than the family car, sometimes more than the family home. Treating it as an afterthought in an estate plan built entirely around the will is where the trouble starts.

Most people find this out too late. Some find it out in court.

The Case That Proves It

In 2005, a father named Ervin Katz died leaving a will that split his estate evenly between his son and daughter. Part of his wealth, more than a million dollars, sat in a self-managed super fund. He’d also left a non-binding note asking that his super be shared equally too.

His daughter, who by then controlled the fund as trustee, paid the entire balance to herself. Her brother took her to court. The NSW Supreme Court found she’d done nothing wrong (Katz v Grossman). The will meant nothing to the outcome. Trustee discretion, not testamentary intention, decided who got paid.

Two decades later, the case still gets cited in every serious conversation about super and estates. The mechanics haven’t changed, and neither has the surprise on people’s faces when they hear about it for the first time. Family disputes over death benefits keep landing in Australian courts for the same underlying reason: someone assumed the will was the whole plan.

Who Actually Decides

Here’s the part most people miss: this isn’t unique to self-managed funds. Every super fund — industry, retail, corporate — runs on the same principle. Absent clear direction from you, the trustee has discretion over how death benefits are paid, guided by the fund’s rules and who qualifies as a dependant.

A binding death benefit nomination changes that. Done properly, it locks the trustee into paying benefits exactly as you’ve directed. Most binding nominations expire after three years unless the fund allows a non-lapsing version. Let one lapse, and you’re back to relying on someone else’s judgement about what you would have wanted.

Second marriages and blended families raise the stakes further. A trustee weighing who counts as a “dependant” can land on an outcome nobody in the family expected, especially where a current spouse, an ex-spouse, and adult children from different relationships are all technically eligible. Without a valid, current nomination pointing the trustee somewhere specific, that decision is theirs to make, not yours.

Where a Will Still Matters

A will can still shape what happens to your super — but only if it’s built to. Directing your death benefit to your legal personal representative brings it back into your estate, and from there a testamentary trust can hold it for children, shield it from a beneficiary’s creditors, or protect it in a blended family. None of that happens on its own. It happens because someone drafted the nomination and the will to work together, matching fund rules against testamentary intentions line by line — the kind of detail trust lawyers Perth clients bring in specifically because a generic template won’t catch it.

What to Check This Month

If you don’t know whether your nomination is binding, current, or even exists, that’s worth fixing now rather than “eventually.” Estate planning lawyers Perth residents turn to for this kind of review will usually ask for your fund’s trust deed alongside your will, because reading either one in isolation misses how they interact. Getting this right means checking nomination validity, cross-referencing dependant definitions, and coordinating any testamentary trusts. It’s the exact gap that put a million dollars in front of a judge in 2005.

If you run a self-managed fund, add one more item: who controls the trustee company or acts as trustee after you’re gone. Katz v Grossman turned on exactly that question. Control of the fund, not the wording of a will, decided who received the money.

Our wills and estate lawyers Perth team reviews superannuation as part of every estate plan we draft, because leaving it out defeats the purpose of the rest. As an estate planning law firm with decades of experience across taxation, superannuation and trusts, we look at your nomination, your fund’s deed, and your will together, not as three separate documents that happen to mention the same person.

If you’re searching for estate planning lawyers near me and want your super to actually follow your intentions, get in touch with Munro Doig for a consultation.