What Is a Codicil to a Will in Australia — and What Does It Mean for Your Life Insurance?
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Written by Christopher Hall, AdvDipFP | Authorised Representative, AFSL 526688 | March 2026
A codicil is a legal document that amends an existing will without requiring the entire will to be rewritten. In Australia, it must be signed, dated and witnessed with the same formality as the original will. However, an important distinction that most Australians miss: updating your will — or adding a codicil — does not automatically update your life insurance beneficiary nominations. These are separate documents held by your insurer or superannuation fund, and they take precedence over your will when it comes to insurance proceeds. Just as a life insurance policy requires regular review to ensure it is fit for purpose and still meets the needs of your family — so too does your death benefit nomination.
The consequences of missing this distinction are not theoretical. In March 2025, ASIC published Report 806 — a landmark investigation into how superannuation funds handle death benefit claims — and the findings were confronting. Families were left waiting months, sometimes longer than a year, for funds their loved ones had paid to protect them. In several cases, the complications arose not from missing nominations, but from documentation that no longer reflected current family circumstances.
This article explains what a codicil is, why it does not affect your insurance beneficiary nominations, what should trigger a review of both your will and your insurance paperwork, and what Australians with self-managed superannuation funds need to understand about the additional obligations on trustees when a member dies. Arrow Equities does not provide legal advice — for will and codicil preparation, a solicitor is the appropriate professional. What Christopher Hall and the team at Arrow Equities do is ensure that the insurance side of the equation is in order.
Arrow Equities is a licensed insurance advice firm, not a law firm. This article provides general insurance and superannuation education only. It does not constitute financial advice, legal advice or a recommendation. For will preparation, codicil execution or estate planning, consult a qualified solicitor.
A Codicil Updates Your Will — But Not Your Insurance
A codicil is used to make minor amendments to an existing will — adding a new executor, updating a specific bequest, or changing how an estate is to be divided. It sits alongside the original will as a formal legal document, and both are read together when the estate is administered. To be valid in Australia, a codicil must be signed and dated by the person making it, and witnessed by two adults who are not beneficiaries under the will.
When you should use a codicil: for straightforward changes that do not affect the fundamental structure of the will. When you should write a new will entirely: major changes such as marriage, divorce, remarriage, the birth of children, or a substantial change in assets. A solicitor will advise which approach is appropriate to your circumstances.
What a codicil cannot do — regardless of how it is drafted — is change who receives your life insurance payout or your superannuation death benefit. Those documents are entirely separate from your will, and they are controlled by different legal instruments held by different organisations.
"A binding death benefit nomination (BDBN) is entirely separate and distinct from a member's will. The payment of death benefits from a superannuation fund is determined in accordance with the governing rules of the superannuation fund and not in accordance with the terms of a member's will."
Source: Pigott Stinson, 'Superannuation death benefit payments', pigott.com.au
In my experience working with clients across more than 500 policy reviews, the conversation about beneficiary nominations rarely starts with insurance. It starts with a will update, a property purchase, an SMSF being established, or a divorce. Clients arrive via a solicitor who has identified the insurance gap, via an accountant managing an SMSF setup, or they call us directly having just updated their will and realised they don't know whether their insurance nominations still reflect their intentions. In every case, two separate professionals are addressing two separate documents — and the task is to make sure both are aligned.
Arrow Equities receives consistent referrals from solicitors, accountants, SMSF specialists and mortgage brokers precisely because of this gap. The legal work and the insurance work need to happen together — but they rarely happen in the same room.
Updating Your Will Does Not Update Your Insurance Beneficiary
Life insurance proceeds do not automatically pass through your will. They pass directly to the person nominated on your insurance policy or superannuation account — and that nomination takes precedence over whatever your will says. If your will leaves everything to your current spouse but your life insurance policy still nominates an ex-spouse from a previous relationship, your ex-spouse receives the life insurance proceeds. Your will has no bearing on it.
This happens more often than most people would expect. According to Christopher Hall, financial adviser and Principal of Arrow Equities (AFSL 526688), the most common reason beneficiary nominations fall out of date is a change in family dynamics — not negligence, but the absence of a regular review prompt:
"The most common reason nominations fall out of date is a change in family dynamics — additional children born after the original nomination was made, superannuation fund changes where the death benefit nomination was never transferred, and the practical reality that the person who paid for the policy will never be alive to experience the consequences of getting it wrong. The people who inherit that administrative burden are already dealing with grief."
— Christopher Hall, AdvDipFP, Arrow Equities — from 500+ policy reviews
There are two layers to this problem. The first is the straightforward legal disconnect: a codicil updates the will, not the insurance nomination. The second is the human cost of that gap — the administrative, regulatory and compliance burden that falls on a grieving family when the paperwork is not in order.
ASIC's landmark March 2025 investigation into how superannuation trustees handle death benefit claims makes this concrete. ASIC reviewed ten trustees representing 38 per cent of all member benefits in APRA-regulated funds and found systemic failures that caused grieving Australians unnecessary distress. One case documented in that report has become emblematic of what can go wrong even when a valid nomination exists:
"In one case, a widow grieving her husband's death faced significant delays and frustration when claiming his $600,000 death benefit. Despite a binding nomination naming her as the sole beneficiary, the trustee repeatedly requested documents she had already provided and, at one point, incorrectly stated there was no nomination. Despite her requests for clarity and assistance, the process dragged on for nearly a year."
Source: ASIC, Report 806 'Taking ownership of death benefits: How trustees can deliver outcomes Australians deserve', 31 March 2025, REP 806, asic.gov.au
That case involved a valid, current binding nomination — and it still took nearly a year. Consider what happens when the nomination is outdated, expired or absent entirely: the trustee then exercises full discretion over who receives the benefit, based on their assessment of who is a dependant at the time of death. That process is slower, more contested, and offers no certainty of outcome.
The practical implication is simple: when you update your will or add a codicil, check your insurance nominations at the same time. They are separate documents, but they should reflect the same intentions.
For superannuation accounts specifically, a nomination is held by the super fund — not by the insurer and not by the will. Changing super funds without updating the nomination means the nomination may be lost entirely. Across more than 500 policy reviews conducted by Christopher Hall of Arrow Equities, clients who changed super funds without updating their nominations represent one of the most consistent patterns encountered — and one of the most straightforward to fix, once identified.
Five Life Events That Should Trigger a Review of Both Your Will and Your Insurance Nominations
Any significant change in your family structure, financial circumstances or relationship status should prompt a simultaneous review of both your will and your insurance beneficiary nominations — because both documents need to reflect the same intentions. Based on Christopher Hall's experience across more than 500 policy reviews at Arrow Equities (AFSL 526688), the triggers that actually prompt clients to act divide into five patterns.
1. Divorce
Divorce is the trigger most likely to be acted on — but it still drags. A legal professional involved in the divorce process will typically direct the client to have their insurance nominations updated as part of the procedural to-do list, which means it does get addressed. However, the process is slowed by having four parties involved — each spouse and their respective legal representatives — and what should be a straightforward administrative update can take considerably longer than it needs to.
Important: A binding death benefit nomination is not automatically revoked when a member separates or divorces from their spouse. The nomination must be actively updated. If a member dies before updating the nomination following separation, the nomination in place at the time of death remains binding.
2. Marriage
Marriage is a less common standalone trigger in practice, because clients without existing financial dependants typically have a lower motivation to hold life insurance in the first place. Marriage and cover tend to arrive together rather than one prompting the other. Where marriage does prompt an insurance review, it is usually because a mortgage is involved — which connects to the most common trigger of all.
3. Birth of a Child
"It's not normally the birth itself that triggers the review — it's approximately nine months later, when the child enters day care or a regular sleep routine and the primary carer has the capacity to act. The pregnancy window generates concern; the newborn window generates preoccupation."
— Christopher Hall, AdvDipFP, Arrow Equities
This pattern has a practical implication for beneficiary nominations: parents who take out or update cover during pregnancy frequently do so before the child is born and therefore before the child can be named. The nomination created at that point may not reflect the intended allocation. A review at the nine-month mark — when the family has stabilised and the parent has capacity — is the natural correction point.
4. Significant Asset Change
By far the most common trigger in Christopher Hall's client base is a change in financial circumstances — assets, liabilities, or both. A client sees a mortgage broker because their financial position has changed. The broker identifies an insurance need or review opportunity. The insurance review surfaces the beneficiary nomination question. This chain of referrals — from mortgage broker to insurance adviser — is the most reliable pathway through which nomination reviews actually happen.
The referral network matters here. Arrow Equities receives consistent referrals from mortgage brokers who value ensuring their clients' assets are protected even in the worst circumstances — not just the assets themselves, but the people those assets are meant to support.
5. Changing Superannuation Funds
This trigger is the least likely to be acted on, and arguably the most consequential. When a client changes super funds, their death benefit nomination does not transfer automatically. The new fund starts with no nomination in place — meaning the trustee has full discretion over how the benefit is distributed — unless the client actively completes a new nomination form. This is rarely front of mind during a super fund transition.
"It may be necessary to review a binding death benefit nomination more regularly than every 3 years. Superannuation, like many things, is not a 'set and forget' matter."
Source: Paul Ellis and Julian Smith, Maddocks, 'SMSF Beneficiary Nominations — keep them current', Cleardocs ClearLaw, first published in Thomson Reuters Weekly Tax Bulletin, cleardocs.com
Binding vs Non-Binding Nominations: What the Difference Costs Your Family
A binding death benefit nomination legally requires your super fund to pay your benefit to your nominated person — a non-binding nomination only suggests it. The distinction determines how fast, and to whom, your insurance proceeds are paid after your death. Getting this wrong does not affect the size of the payout — it affects whether it reaches the right person.
The Three Nomination Types
ASIC's MoneySmart — the Australian government's consumer financial guidance resource — sets out three types of nomination available in retail and industry super funds:
"Lapsing nominations (binding): The super fund, in the event of your death, must pay your super benefit to your nominated beneficiary, unless it would be unlawful to do so. This expires after a maximum period of 3 years. Non-lapsing nominations (binding): A nomination that is binding with the consent of the super fund under the terms of the trust deed and does not expire after a period of time. Non-binding nominations: Guides your super fund trustee on who should get your super if you die. The trustee is not bound to follow these instructions."
Source: ASIC MoneySmart, 'Who gets your super if you die', moneysmart.gov.au (current, 2025)
The practical default for most Australians is the lapsing binding nomination — it expires after three years. If it lapses and is not renewed, most funds will treat it as a non-binding nomination. The trustee then has discretion. ASIC's review of 22 super fund websites found that most funds offer lapsing binding nominations as the standard option — and that only a current, valid binding nomination overrides the trustee's discretion at the time of death.
The recommendation from ASIC MoneySmart is direct: set a calendar reminder to renew the nomination approximately one month before the three-year expiry date. The cost of not renewing is significant — not in dollars, but in control.
Self-Managed Superannuation Funds: Different Rules Apply
When clients are referred to Arrow Equities specifically to arrange insurance inside their SMSF, the insurer's position is clear: they pay the proceeds to the fund. What clients frequently do not appreciate is that the work begins when the money arrives. The surviving trustee needs to have the right paperwork in place — valid nominations, trustee minutes, correct cashing documentation — or they risk creating a compliance problem on top of a bereavement. That is an entirely avoidable burden.
The SIS Act distinction for SMSFs is important. The ATO's SMSF Determination 2008/3 (SMSFD 2008/3) confirms that Section 59 of the Superannuation Industry (Supervision) Act 1993 and Regulation 6.17A of the SIS Regulations do not apply to self-managed superannuation funds.
"The governing rules of an SMSF may permit members to make death benefit nominations that are binding on the trustee, whether or not in circumstances that accord with the rules in regulation 6.17A of the SISR."
Source: ATO, SMSF Determination 2008/3 (SMSFD 2008/3), paragraph 1, Australian Taxation Office, 17 December 2008, ato.gov.au
This was confirmed as the binding legal position when the High Court of Australia unanimously dismissed an appeal in Hill v Zuda Pty Ltd as Trustee for the Holly Superannuation Fund [2022] HCA 21, decided on 15 June 2022. The Court confirmed that the three-year lapsing requirement does not automatically apply to SMSF binding death benefit nominations — provided the SMSF trust deed properly supports a non-lapsing arrangement.
In practice, this means that SMSF members can make non-lapsing binding nominations that remain in force indefinitely — but only if the fund's trust deed contains the necessary provisions. Many older SMSF deeds do not. A solicitor with SMSF expertise should review the deed before relying on any BDBN as non-lapsing.
The risk of having no valid BDBN in an SMSF is more acute than in a retail or industry fund. In the absence of a binding nomination, the person left in control of the SMSF may decline to follow a non-binding nomination and may pay death benefits as the trustee sees fit. Case law has confirmed this risk is real — including Katz v Grossman [2005] NSWSC 934 and Ioppolo & Hesford v Conti [2013] WASC 389, in which surviving trustees distributed benefits to their own advantage in the absence of a binding nomination.
"In the absence of a binding nomination, the person left in control of the SMSF may decline to follow the deceased's non-binding nomination and/or decide to pay the death benefits to themselves directly."
Source: NSW Law Society, 'Superannuation Death Benefit FAQs', last reviewed August 2020, lawsociety.com.au
When the Life Insurance Payout Arrives in the SMSF: Six Steps for the Surviving Trustee
Consider the scenario Christopher Hall encounters regularly with referred SMSF clients: a husband and wife are members and trustees of a self-managed super fund. The husband holds a life insurance policy inside the fund. He passes away. The insurer pays the proceeds directly into the SMSF bank account. The wife — as the surviving trustee — wants to use those funds to pay off the mortgage and meet the family's financial needs. That is exactly what the insurance was for.
What most clients do not anticipate is the sequence of compliance steps that must happen before the money can move. Getting these steps right protects the surviving trustee from later audit issues and ensures the benefit is paid in a tax-effective, legally compliant manner.
Confirm the binding death benefit nomination was valid at the date of death.If the BDBN had lapsed or was never made, the trustee exercises discretion under the trust deed and superannuation law. The nomination — or its absence — controls what happens next.
Record the insurance proceeds entering the fund correctly.Document the source (the life insurer), the date and the amount. The proceeds form part of the deceased member's accumulation account and must be recorded accordingly.
Pay the death benefit as soon as practicable.The ATO expects payment within six months of the member's death unless the trustee can demonstrate valid reasons for delay. Market conditions are unlikely to be accepted as justification.
Notify the ATO of any change in trustee structure within 28 days.If the fund's trustee structure changes as a result of the member's death, this must be notified to the ATO within 28 days. The fund then has six months to restructure.
Confirm PAYG withholding obligations before transferring the benefit.A lump sum death benefit paid to a dependant spouse is tax-free — it is not assessable income and the SMSF does not withhold tax from the payment. Different treatment applies if any portion is paid to a non-dependant.
Record all trustee decisions in formal minutes.Every decision made in this process must be minuted and retained. These records support the annual independent SMSF audit and provide evidence of compliance with the fund's governing rules and superannuation law.
"Death benefits should be paid as soon as possible after the member's death... The ATO generally expects payment to be within six months of death unless the trustee can demonstrate valid reasons for the delay. The ATO view is that lump sum death benefits must actually be 'paid' to the beneficiary — journal entries in the accounts of the SMSF will not constitute a 'payment' to satisfy the cashing rules."
Source: ATO, 'Death of an SMSF member', ato.gov.au; SMSF Association, 'Super death benefits guide', October 2019, smsfassociation.com
Additionally, since 2012, the ATO has required SMSF trustees to formally consider whether each member needs insurance and to document that consideration as part of the fund's written investment strategy. When insurers refer clients to Arrow Equities to have the insurance arranged, they are operating within a regulatory framework that expects documented consideration — not just a policy in place.
Book a Free Policy Review
If you are updating your will, adding a codicil, changing superannuation funds, or have recently experienced a change in family or financial circumstances, it is worth spending a few minutes checking whether your insurance beneficiary nominations still reflect your intentions.
According to Christopher Hall, AdvDipFP and Authorised Representative of Arrow Equities under AFSL 526688, who has conducted more than 500 life insurance policy reviews across Australia: spending five to ten minutes on a nomination form every couple of years is worth months — possibly years — of administrative, regulatory and emotional burden for the people left behind.
A free policy review with Christopher Hall covers both your existing policies and who is nominated to receive them. There is no cost, no obligation, and no product to sell — only clarity about whether your cover is working the way you intended.
Frequently Asked Questions
Codicil, life insurance and beneficiary nominations — common questions answered.
What is a codicil to a will in Australia?
A codicil is a formal legal document that amends an existing will without requiring the entire will to be rewritten. It is used for minor changes — updating an executor, adding a specific bequest, or changing how part of the estate is divided. To be valid in Australia, a codicil must be signed and dated by the person making it and witnessed by two adults who are not beneficiaries under the will. Both the original will and the codicil are read together when the estate is administered. For major changes — such as marriage, divorce, or a significant shift in assets — legal practitioners generally recommend writing a new will rather than adding a codicil. Arrow Equities does not provide legal advice; speak with a solicitor for will or codicil preparation.
Does a codicil update my life insurance beneficiary?
No. A codicil updates your will — it does not update your life insurance beneficiary nominations or your superannuation death benefit nominations. These are entirely separate documents held by your insurer or superannuation fund, and they take precedence over your will when it comes to insurance proceeds. ASIC MoneySmart — the Australian government's consumer financial guidance resource — is explicit: without a valid binding nomination in place, your fund decides who receives the money, and that may not match what you intended. Updating your will and updating your insurance nominations must be treated as two separate tasks, completed at the same time.
How do I update my life insurance beneficiary?
The process depends on where your insurance is held. For a retail life insurance policy held outside superannuation, contact your insurer directly and request a change of beneficiary form. For insurance held inside a retail or industry superannuation fund, log in to your super fund's online portal or contact the fund and complete a binding death benefit nomination form. For insurance held inside a self-managed superannuation fund (SMSF), a new binding death benefit nomination must be executed in accordance with the SMSF trust deed — which may require both a new nomination form and a review of the deed itself. Christopher Hall and the team at Arrow Equities can help you understand what you currently hold and whether your nominations are up to date.
What happens to my life insurance if I die without updating my beneficiary?
The outcome depends on the type of nomination in place. If a valid binding nomination exists, the fund must pay the benefit to the nominated person — regardless of what the will says. If the binding nomination has lapsed (most lapse after three years), it is typically treated as non-binding, and the trustee has discretion over who receives the benefit. If there is no nomination at all, the trustee decides based on the fund's trust deed and superannuation law. This process can take months. ASIC's Report 806 (March 2025) documented cases where even families with valid nominations experienced delays of nearly a year. Without a current nomination, the process is slower and offers no certainty of outcome. Review your nomination every three years as a minimum — and any time your family or financial circumstances change.
What is a binding death benefit nomination in superannuation?
A binding death benefit nomination (BDBN) is a legal instruction to your superannuation fund trustee to pay your death benefit to a specific person or persons, in specific proportions. When a valid BDBN is in place at the time of death, the trustee must follow it. ASIC MoneySmart confirms that lapsing binding nominations expire after a maximum of three years and must be renewed. Non-lapsing binding nominations do not expire — but not all funds offer them, and they are subject to the fund's trust deed. For self-managed superannuation funds (SMSFs), the rules are different: the High Court confirmed in Hill v Zuda Pty Ltd [2022] HCA 21 that the three-year lapsing requirement in Regulation 6.17A of the SIS Regulations does not apply to SMSFs, meaning a properly drafted SMSF BDBN can be made non-lapsing — provided the trust deed supports it. A solicitor with SMSF expertise should review the deed before relying on any non-lapsing arrangement.
How often should I review my will and insurance beneficiary nominations?
At minimum, review your binding death benefit nomination before its three-year expiry — set a calendar reminder one month before the expiry date, as ASIC MoneySmart recommends. Beyond the three-year cycle, review any time your circumstances change: divorce or separation, marriage, the birth or addition of children to the family, a significant change in assets or liabilities, or a change of superannuation fund. In practice, a change in financial circumstances is the most common prompt — typically initiated when a client is seeing a mortgage broker and the insurance conversation follows naturally from there. As Maddocks — SMSF legal specialists — note in their published guidance: "Superannuation, like many things, is not a set and forget matter." The same applies to every life insurance beneficiary nomination.
More on Life Insurance and Superannuation from Arrow Equities
Christopher Hall and the team at Arrow Equities write regularly on life insurance, TPD, income protection and superannuation from the perspective of a licensed adviser with experience across more than 500 Australian policy reviews.
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About the Author
Christopher Hall, AdvDipFP | Authorised Representative, AFSL 526688 | Arrow Equities
Christopher Hall is a financial adviser and Principal of Arrow Equities — an independent life insurance advice firm based in Rose Bay, NSW, authorised under AFSL 526688 through Rose Bay Equities Pty Ltd. He holds an Advanced Diploma of Financial Planning and has conducted more than 500 life insurance policy reviews, specialising in life risk insurance advice for Australian families. To learn more or book a free review: arrowequities.com.au/christopher-hall
Update log
March 2026 — Initial publication. ASIC REP 806 (March 2025) and Hill v Zuda [2022] HCA 21 incorporated.
Sources and further reading
ASIC MoneySmart — 'Who gets your super if you die': moneysmart.gov.au
ASIC MoneySmart — 'Protecting your superannuation after death': moneysmart.gov.au
ASIC — 'Improving superannuation member services — Dealing with death benefit claims', May 2024: asic.gov.au
ASIC Report 806 — 'Taking ownership of death benefits', 31 March 2025: asic.gov.au (PDF)
ASIC Media Release 25-034MR — ASIC v AustralianSuper, 12 March 2025: asic.gov.au
ASIC Media Release 25-286MR — Cbus $23.5 million Federal Court penalty, 2025: asic.gov.au
ATO — SMSF Determination 2008/3 (SMSFD 2008/3), 17 December 2008: ato.gov.au
High Court of Australia — Hill v Zuda Pty Ltd as Trustee for the Holly Superannuation Fund [2022] HCA 21, 15 June 2022
ATO — 'Death of an SMSF member': ato.gov.au
SMSF Association — 'Super death benefits guide', October 2019: smsfassociation.com
NSW Law Society — 'Superannuation Death Benefit FAQs', last reviewed August 2020: lawsociety.com.au
Paul Ellis and Julian Smith, Maddocks — 'SMSF Beneficiary Nominations — keep them current', Cleardocs ClearLaw: cleardocs.com
Pigott Stinson — 'Superannuation death benefit payments': pigott.com.au
Christopher Hall, Arrow Equities — proprietary findings from 500+ Australian life insurance policy reviews, 2026
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