It’s a mistake thousands of Australians don’t even realise they’re making — one that could spark bitter family disputes and cost hundreds of thousands of dollars. Experts are warning that a simple oversight in superannuation paperwork is quietly creating chaos in estates across the country.
The Hidden Superannuation Mistake
Most people assume their will decides who inherits their assets after death. But when it comes to superannuation, things aren’t that simple. Unless someone has a valid binding death benefit nomination, their super fund — not their will — determines who receives the money.
And here’s where it gets tricky: those nominations usually expire after three years. When they lapse, the fund trustee can redirect the money to someone entirely different from the person’s wishes. That’s led to real-life cases where children have missed out on hundreds of thousands of dollars, with payouts instead going to former partners or de facto spouses.
Many Australians fill out the form once and forget about it, thinking it’s permanent. But experts say the rules are far from static. Marriage, divorce, or even the birth of a child can change how the form is interpreted, often with devastating consequences for families left behind.
Superannuation Confusion Fuels Costly Family Disputes
Lawyers say this misunderstanding is now one of the leading causes of family disputes and court battles over wills. As super balances grow — and as Australians prepare to transfer an estimated $5.4 trillion in wealth to younger generations over the next two decades — the number of contested estates is expected to rise sharply.
A recent survey by Super Consumers Australia found that more than a third of Australians don’t have a death benefit nomination at all, while one in four don’t know if theirs is legally binding. That’s a costly blind spot in a country where the average super payout can easily exceed $300,000, reports Yahoo Finance.
A Warning for the Future
Experts urge Australians to treat superannuation as a separate part of their estate planning — not an afterthought. Updating the nomination every few years, and especially after major life changes, can help prevent disputes later on.
It’s not exactly a cheerful topic, but the consequences of neglect can be brutal: broken family relationships, legal bills, and years of fighting over what was once meant to provide financial security. In the end, a few minutes spent checking one form could be the difference between a smooth inheritance — and a courtroom battle that tears a family apart.
