Q. I am a retired widow and I had decided to change the beneficiary of my superannuation from my child to my grandchildren, but have discovered that I am unable to do so because they are not ‘financially dependent’ on me, nor do we have an ‘interdependent relationship’. They receive birthday and Christmas presents/cash from me and I help out on occasions with money. I do not wish to leave the superannuation (which is not large by any means) to my children. So, the above leaves me ask the questions:
A. This is a good question. Actually, neither your children nor your grandchildren may be regarded as financially dependent or in an interdependent relationship for superannuation purposes unless they meet strict technical guidelines. To be financially dependent effectively means what it says – the children or grandchildren must be still living with you and/or dependent upon you to meet the majority of their financial needs. Occasional gifts will definitely not qualify you for this definition.
An interdependent relationship implies someone being emotionally or financially dependent upon you and could include, for example, a sibling or a parent or other family member.
Assuming that your grandchildren do not fit these categories, you can still leave your superannuation entitlements to them through your will, however. You can instruct your superannuation fund that your beneficiary is your ‘personal legal representative’ as this person is effectively the executor of your estate. You then need to ensure you specify in your will that your superannuation monies are to be left directly to your grandchildren.
You should be aware that non-dependent grandchildren will pay some tax on the receipt of the superannuation benefit. You will need to get personal advice if you want to find out how much, but it is a maximum of 15 percent of the account balance.
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