What is a beneficiary and why are they important?
In Queensland, a beneficiary of a Will is a person or entity named in the Will to receive all or a portion of the deceased person’s assets. These assets may include property, money, and other personal possessions.
The importance of identifying beneficiaries in a Will is to ensure that the deceased person’s instructions for the distribution of their assets are carried out according to their last wishes. It means you are able to finalise your loved ones assets and finances swiftly after their passing.
Why are beneficiaries important when it comes to superannuation?
Superannuation is a type of retirement savings plan that the majority of Australians have when they start work, it is also included in your list of assets. Employers can set this up on your behalf – so you may not even know you have a superannuation fund. When a person dies, their superannuation benefits will be paid out to their beneficiaries as noted in their Will. However, if a person does not have a valid Will, their superannuation benefits may be paid out to their next of kin or spouses, instead of to the people they name in their Will. If a person does not have a valid Will and dies without any dependents, their superannuation benefits may be paid to the State Government.
It is important to ensure that a Will is up to date and includes specific instructions for the distribution of superannuation benefits. This can be done by naming a specific beneficiary or by creating a trust to hold the benefits for the named beneficiaries for a period of time.
Another important aspect to consider is that superannuation death benefits can be paid as a lump sum or as an income stream, and the Will should state which option the deceased person preferred.
It’s important to consult with a legal professional when drafting a Will, to ensure that it is legally binding and that the distribution of assets, including superannuation benefits, is carried out according to the deceased person’s wishes.
Why is this relevant for TPD (Total and Permanent Disability Insurance)?
Total and Permanent Disability (TPD) insurance is a type of insurance that provides a lump sum benefit to an individual who has become totally and permanently disabled, as defined by the superannuation policy. This benefit can be used to cover medical expenses, pay off debts, and provide for the financial needs and associated family needs.
In Queensland, identifying beneficiaries in a Will is important for TPD insurance because it ensures that the disabled individual’s assets, including any TPD benefits included in their superannuation, are distributed according to their instructions.
Additionally, if the disabled individual has a TPD insurance policy that pays a lump sum benefit, the Will should specify how the benefit is to be distributed among the beneficiaries.
It’s also important to note that TPD insurance policies may have their own rules and regulations about how the benefits can be used and distributed, and the Will should be written in accordance with those rules.
Super Claims Assist are experts in TPD insurance payouts. We can assess your current eligibility and provide legal advice around how to best manage your TPD superannuation insurances. Give us a confidential, no obligation call today!