Q&A: Can I receive my deceased spouse’s accumulation death benefit in a pension income stream?

For example, even if I die at age of 30, my money still becomes unrestricted non-preserved. It means that my beneficiaries can do what they want with my superannuation death benefit. It allows access to these benefits under legislation, but within the fund rules, the trust deed rules. So, the unrestricted non-preserved nature of those benefits means that we can access them under legislation.

Then we need to see how the fund will let us access those monies. So, I’m separating this into super law and fund rules. Once the death has occurred, the money becomes unrestricted non-preserved, the remaining fund trustees, if it’s an SMSF, or if it’s an industry or retail style fund then the formal trustees, look to see how they can and how they’re required to pay out that death benefit.

What I mean by that is, check the trust deed for rules around that. Does it allow a death benefit by way of pension? Most trust deeds would. Does it allow a death benefit by way of a lump sum? Most trust deeds would. Does it allow death benefit, a combination of both those things? And again, most trust deeds would.

Then we need to see if there’s any specific nominations which have been put in place. Has the deceased said how he wants his super paid? And is it a valid nomination? I might have made a valid nomination that I want my spouse to take a lump sum. And if it’s all valid, all done properly, that is how the benefit would need to be paid. I might have had it that it’s got to be paid as a pension.

So again, all of those things just need to be followed. But yes, most trust deeds would allow our death benefits to be paid by way with death benefit income stream from super. Of course, we would need to take into consideration the transfer balance account restrictions that apply. So, if I die, my wife takes a pension, she’s limited to the transfer balance cap.