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Indeed under superannuation law, a super fund must be maintained for the core purpose of providing retirement or death benefits for members.

The rapid ageing of the population, the growth in total superannuation assets and the prevalence of "blended families" with children from different relationships perhaps make estate planning for super even more crucial than in the past.

Estate planning for super can be a complex issue, underling the value of specialist professional advice. Issues in superannuation, taxation and trust law should be taken into account along with a super fund member's personal circumstances.

In short, the over-arching aims of thorough estate planning for your super are typically that your benefits are passed in the most efficient way to your chosen and eligible beneficiaries while minimising the likelihood of future family disputes.

The latest statistics (PDF) from the Superannuation Complaints Tribunal show that if an individual ever makes a formal complaint about a large super fund, chances are it will be about the distribution of super death benefits. Complaints to the tribunal concerning death benefits rank only second in number to complaints about fund administration. The tribunal does not hear complaints regarding SMSFs.

(Fortunately, the tribunal received just 400 complaints within jurisdiction over the latest March quarter – a miniscule number considering that more than 18 million individuals hold more than 30 million super accounts.)

As reported over the past week by Super News Alert, published by Thomson Reuters, the Supreme Court of Victoria has ruled that the replacement trustees of an SMSF had standing to seek a review of $370,000 in legal fees. The fees had been charged to the fund's previous corporate trustee and paid from fund assets to defend a death benefits claim.

The court's decision regarding the legal fees further highlights the case for superannuation estate planning. A blended family was involved in this dispute over super death benefits.

Superannuation estate-planning questions to consider raising with an appropriate adviser may include:

• Who is eligible to receive my super death benefits? (Superannuation death benefits, which comprise super savings and life insurance, are generally only payable to deceased members' dependants, as defined in superannuation law, or to their estate.)
• What are the comparative characteristics of non-binding and binding death benefit nominations?
• What is the tax treatment of my super death benefits in the hands of the beneficiaries – including financially independent adult children? (Different beneficiaries may be taxed differently.)
• How can I minimise the potential difficulties for a surviving trustee(s) of my family's SMSF? (This can be particular consideration following the death of the most-active member of a self-managed fund.)

Many super fund members tend to understandably focus their attention on maximising their ability to contribute in super during their working lives and then on stretching those savings throughout their retirement. Close attention should also be given to estate planning for super.

By Robin Bowerman
Smart Investing 
Principal & Head of Retail, Vanguard Investments Australia
29 June 2015