The death of a loved one can be upsetting and traumatic for surviving spouses, family and friends. Part of the added strain comes when beneficiaries and/or executors seek to access the member’s superannuation fund/s or income stream/s. Superannuation funds, like other financial institutions have procedures they need to follow and documentation requirements prior to releasing funds.
These processes take time and in some cases add pressure to family and/or surviving spouses to cover the costs associated with funerals as well as meeting ongoing living expenses. To reduce the stress involved there are a few simple steps that can be taken by the superannuant prior to death as well as surviving parties after the event.
Firstly, it is prudent for the superannuant to keep records, which can be easily located, of the funds held including member/account numbers, their tax file number, beneficiary details and statements showing balances and the number of units held if applicable. It is also prudent to keep in the same place details of relevant contacts within the fund and/or the member’s financial planner if applicable, who may assist with the process. Apart from having a current Will in place, beneficiary nominations should be made where possible for the fund to use when distributing payments.
In the event of death the funeral director will register the death with the relevant state or territory government office often called ‘Births Deaths and Marriages’. A Death Certificate is then issued by this office which allows surviving family, beneficiaries and/or executors to apply for probate, if applicable, to present along with the Death Certificate to the relevant superannuation funds.
Once the fund has been notified and the Death Certificate and probate have been presented they will process the ‘death benefit’ request as per the fund’s trust deed procedures and the beneficiaries/executors instructions. This can involve the completion of forms, providing identification details, tax file numbers and payment instructions as well as the fund assessing eligibility of nominated beneficiaries and/or implementing reversionary beneficiary pensions.
If no nominated beneficiaries were listed by the member, the balance of the fund is paid to the executor of the estate to distribute in accordance with the deceased’s will. If there is no will (dies intestate) or there are conflicts among potential beneficiaries the process could end up being costly and taking a long time to finalise.
So with a bit of planning and preparation, undue stress costs and delays may be avoided.