Superannuation after death - what every tradie needs to know

If you’re running a trade or maintenance business, chances are super isn’t something you think about much beyond making sure your contributions are paid. But here’s the thing: when you pass away, your super doesn’t automatically go to your estate or family.

And that can cause serious problems.

Complaints about how super funds handle death benefits have jumped sevenfold since 2021. While most are paid within three months, some families are waiting over a year, often because the member didn’t have the right nomination in place.

Why this matters for new business owners

In the first five years of business, most tradies are focused on getting jobs done, chasing invoices, and keeping on top of BAS. Super (and what happens to it when you die) doesn’t usually make the list. But if something unexpected happens, your family could be left waiting - or worse, fighting over who gets what.

Types of death nominations

• Binding nomination: Locks in who gets your super. Lapses typically occur after three years unless you make it non-lapsing.

• Non-lapsing binding: If your fund allows it, this stays valid until you change it.

• Non-binding nomination: A “guide” for the trustee, but they can still decide differently.

• Reversionary beneficiary: If you’re drawing a super pension, the income continues to your nominated dependant.

Who can receive it?

Your super can only go to dependants (spouse, kids, or someone financially reliant on you), your estate, or your legal personal representative (executor of your will).

Common mistakes tradies make

• Forgetting to update nominations when life changes (new partner, kids, divorce)

• Using nicknames instead of legal names

• Not signing and witnessing forms properly

• Letting binding nominations lapse after three years

Bottom line

You don’t need to be “old” to sort this out. Check your super fund today and make sure your nomination is valid and current. It’s one of those simple admin jobs that could save your family months of stress if something happens.

Inside the Small Business Foundations course, we help tradies lock in these lessons from day one so they don’t have to learn the hard way.