Spring Clean Your Financial Life

Spring is when many households turn their attention to the parts of life that accumulate clutter unnoticed: the garage, the wardrobe, the pantry. A financial life accumulates a version of the same clutter, in the form of nominations, policies, subscriptions, and accounts that were set up once and then left. Superannuation alone was the subject of a five-step health check in these pages in July 2024; the review that follows is broader, covering five areas of financial administration worth revisiting each year regardless of what is happening inside the super fund itself.

Beneficiary nominations

Most superannuation death benefits are paid according to either a binding or a non-binding nomination held with the fund. A non-binding nomination signals a preference but leaves the trustee with final discretion over who receives the benefit and in what proportions. A binding nomination compels the trustee to pay the benefit as directed, provided it remains valid and the nominated recipients are eligible: a spouse or de facto partner, a child of any age, another person in an interdependency relationship, or the estate via the legal personal representative. Most binding nominations lapse after three years unless the fund offers a non-lapsing version, and a lapsed nomination reverts the decision to trustee discretion just as if none had been made.

A currency check on nominations should cover:

• Whether an existing nomination is binding or non-binding, and whether it is lapsing or non-lapsing

• The date it was signed, and whether three years have passed since a lapsing nomination was made or last renewed

• Whether the nominated beneficiaries are still the intended recipients, particularly after a marriage, divorce, new relationship, or death in the family

• For self-managed super funds, whether the trust deed permits binding nominations and the fund's own procedural requirements have been followed exactly, since a technical defect can invalidate an otherwise sound nomination

Insurance review

Life insurance, total and permanent disability cover, and income protection are usually set up once, often through a default arrangement inside superannuation, and rarely revisited unless a life event forces the question. The level and type of cover suited to a young family carrying a large mortgage looks different a decade or two later, once the mortgage is smaller, children are more independent, and the superannuation balance itself represents a growing part of the overall safety net.

Points worth checking include:

The level of cover against current debts, dependants, and income needs, rather than the level set when the policy began

Where the premiums are paid from, inside super or outside, and whether that still suits the current balance and tax position

The definitions attached to total and permanent disability and income protection cover, since older policies can carry more generous terms that a replacement policy might not match

Whether the nominated beneficiaries or ownership structure on each policy still line up with the current estate plan

Recurring costs and subscriptions

Subscriptions and recurring payments accumulate in small increments: streaming services, software, memberships, and automatic renewals that were useful when first added and easy to overlook afterward. None of these amounts is significant on its own, but the cumulative total is often larger than expected once it is tallied.

A subscription audit typically involves:

• Listing every recurring debit across bank and credit card statements for the past three months

• Cancelling or downgrading anything no longer used, and consolidating services that overlap

• Checking whether an annual payment option offers a worthwhile discount over the monthly equivalent for services that will clearly continue

• Reviewing insurance policies outside super, such as home, contents, and vehicle cover, for the same premium creep

Superannuation consolidation

Multiple superannuation accounts, often a legacy of changing employers, mean multiple sets of fees and, in some cases, multiple insurance premiums attached to cover that may duplicate or lapse without being used. The Australian Taxation Office holds details of any lost or unclaimed super linked to a tax file number, which can be checked through the ATO's services in myGov.

Before consolidating, it is worth:

• Checking myGov for any lost, unclaimed, or additional super accounts linked under a tax file number

• Comparing fees, investment options, and insurance terms across accounts, since insurance cover inside an account being closed cannot always be replicated on the same terms elsewhere

• Updating the default fund nomination with the current employer once a rollover has occurred, so a new account is not opened automatically at the next job change

Will and estate documents

A Will drafted years or decades ago may no longer reflect current assets, relationships, or intentions. Superannuation and any attached life insurance sit alongside more conventional estate assets in this review, since a death benefit is not automatically covered by a Will unless the fund pays it to the estate. An enduring power of attorney, and in some states an enduring guardianship or medical treatment decision maker appointment, cover decisions made in the event of incapacity rather than death, and are just as often left unreviewed.

The estate documents worth revisiting are:

• The Will itself, for current assets, beneficiaries, and executor appointments, particularly after a change in relationship status or family circumstances

• Whether an enduring power of attorney is in place, and whether the appointed attorney remains an appropriate choice

• Whether superannuation and life insurance proceeds are directed by binding nomination or intended to pass through the estate, and whether the Will and the nomination are consistent with each other rather than working against each other

A whole-of-life review like this does not need to happen in full every year, but setting aside time each spring keeps small gaps from turning into larger ones. Where any of the above raises a question, particularly around how nominations, insurance, and the Will fit together as one plan rather than several separate documents, please get in touch to discuss.