Why estate planning matters for Defence families

Estate planning is simply deciding who looks after your affairs, and who receives what, if you die or can no longer make decisions yourself. For ADF members and veterans it has a few extra moving parts: military super schemes with their own rules, DVA benefits that may flow to your partner or children, and service-related risks that can make planning feel more urgent.

Getting it right isn’t about paperwork for its own sake. It’s about making a hard time a little easier for the people you leave behind.

Why your super doesn’t automatically follow your will

Super is held in trust by your fund, so it doesn’t automatically form part of your estate. Your will only controls your super if the benefit is paid to your legal personal representative (the executor of your estate). Otherwise, the fund pays it according to your nomination and its rules.

Most accumulation funds, including ADF Super, offer some or all of these options:

• Binding nomination (lapsing) – the trustee must follow it if it’s valid, but it expires, usually after three years. CSC asks ADF Super members to renew binding nominations every three years.
• Binding nomination (non-lapsing) – doesn’t expire, if your fund offers it. It still needs updating when your circumstances change.
• Non-binding nomination – tells the trustee your wishes, but the trustee makes the final decision.
• Reversionary pension – if you’re drawing a super pension, it can continue to a nominated dependant (such as your spouse) after your death.

You can generally only nominate your spouse or partner, your children (of any age), someone financially dependent on you or in an interdependency relationship with you, or your estate. A nomination that doesn’t meet the fund’s rules – for example, one not witnessed correctly – may be invalid.

Military super: DFRDB and MSBS work differently

If you’re a member of a defined benefit scheme such as DFRDB or MSBS (MilitarySuper), you can’t nominate a beneficiary. CSC explains that scheme rules decide who receives the benefit when a member dies.

• Benefits are generally paid to an eligible spouse and/or eligible children, often as a reversionary pension for a spouse and pensions for children while they remain eligible.
• If there are no eligible beneficiaries, the benefit is generally paid to your estate, where your will then applies.
• The rules on who counts as an eligible spouse or child – including how the timing and nature of a relationship is treated – are set by each scheme. It’s worth checking with CSC how your situation would be treated, especially after a new relationship or separation.

Because you can’t redirect these benefits, the rest of your plan – your will, any ADF Super or other super accounts, and insurance – may need to do the balancing. Our military superannuation guide covers the schemes in more detail.

Tax on super death benefits

How much tax is paid depends on whether the person receiving the benefit is a dependant for tax purposes. This definition is narrower than many people expect: it includes your spouse or former spouse, children under 18, anyone financially dependent on you and anyone in an interdependency relationship with you. Adult children are often not dependants for tax purposes.

A few points worth knowing:

• Public sector schemes, including military schemes, are commonly unfunded, so benefits can include an untaxed element, which attracts the higher rate if paid to a non-dependant.
• If a benefit reaches a non-dependant through your estate, the Medicare levy generally isn’t withheld, though tax still applies to the taxable component.
• Where an ADF member dies in the line of duty, a lump sum paid to a non-dependant is treated as if it were paid to a dependant for tax purposes.
• Death benefit pensions paid to children generally stop by age 25 (unless the child has a permanent disability), with the balance paid as a tax-free lump sum.

DVA benefits for your partner and children

DVA support for dependants is separate from your super and your will – it can’t be left to someone by nomination. What’s available depends on your service, the legislation that applies and, for some benefits, whether your death is accepted as service-related.

• From 1 July 2026, all new DVA claims, including those relating to death, are considered under the MRCA. Support can include a wholly dependent partner payment, compensation for eligible children, Gold Card access, education assistance and help with funeral costs.
• War widow(er)’s and orphan’s pensions already granted under the VEA before 1 July 2026 continue to be paid.

Letting your family know which acts your service falls under, and where your DVA file number is kept, can make claims much simpler.

Wills, testamentary trusts and powers of attorney

We always recommend working with a solicitor on legal documents. The main ones to discuss are:

• Will – sets out who receives your estate and who manages it (your executor), and can name guardians for young children. Marriage and divorce can affect an existing will, and the rules differ between states.
• Testamentary trust – a trust created by your will. It can help protect assets for young or vulnerable beneficiaries and may provide tax flexibility, including for income distributed to children.
• Enduring power of attorney – lets someone you trust manage your financial affairs (and, in some states, personal matters) if you lose capacity.
• Medical decision maker – names who makes medical decisions for you if you can’t. In Victoria this is a medical treatment decision maker; other states use enduring guardianship or similar documents. Appointments made under earlier Victorian laws, and valid appointments from other states, are generally still recognised.
• Advance care directive – records your own wishes about future medical treatment.

Names, forms and witnessing rules vary from state to state, so if you’ve moved with Defence it’s worth having a solicitor check your documents still work where you live now.

Keeping everything up to date – and findable

Plans go stale. Review your will, nominations and powers of attorney after:

• marriage, a new partner, separation or divorce
• the birth or adoption of a child or grandchild
• discharge, transfer between super funds or starting a pension
• buying or selling a home or receiving an inheritance
• a lapsing nomination approaching its expiry date.

Then tell the right people where things are. A simple list – your solicitor’s details, where the original will is held, super and CSC member numbers, your DVA file number, insurance policies and key online accounts – can save your family weeks of searching.

Things to weigh up

• Nominate or go through your estate? Paying super directly can be quicker and keeps it out of estate disputes; paying it to your estate lets your will and any testamentary trust control it, but may expose it to claims.
• Who is a dependant for tax purposes? The same amount can arrive with very different tax depending on who receives it.
• Pension or lump sum for your partner? A reversionary pension provides ongoing income, but has transfer balance cap and flexibility implications to consider.
• Fairness across the family, especially in blended families where a scheme pension will go to your current spouse.
• Who you trust as executor and attorney – and whether they’re willing and able to do the job.

Common mistakes to avoid

• Assuming your will covers your super or your DFRDB or MSBS benefit.
• Letting a binding nomination lapse, or nominating someone who isn’t eligible.
• Forgetting to update documents after separation, remarriage or a new child.
• Using a DIY will kit for a complex situation, such as a blended family or business interests.
• Leaving no enduring power of attorney, so family may need to apply to a tribunal to manage your affairs.
• Not telling anyone where your documents are kept.