Superannuation & Beneficiary Nominations
For many people, funds in superannuation form a substantial part of total estate assets.
But who gets the assets if you die? Nominating the right beneficiaries may help superannuation assets be distributed in accordance with your wishes in a tax effective manner.
Binding Nominations
Some superannuation funds offer a binding death benefit nomination facility. If this is available and chosen by the member, the fund trustee must pay the deceased’s benefits to the person or people nominated.
What are the benefits of making a Binding Nomination?
You get to remove any uncertainty about who receives your Super (including insurance amounts when you die). This means you can nominate exactly who gets what. This makes your Estate Planning more precise and effective.
Who can I nominate?
You can nominate any of your dependants as defined under the Super law i.e. your current spouse (including your defacto) or your child of any age (including adopted children) or a person financially dependant on you at the time of your death (your mother-in-law that is living with you). You can also nominate your Estate to receive your fund as part of the assets in your Will.
You can split the benefit between people as long as you give details of those dependants and the proportional share you want to go to them. Only the nominees who are dependant at the time of your death can receive your Super.
Must I make a Binding Nomination?
No. The decision is yours to make. You can make a binding nomination at any time prior to your death (provided that you have mental capacity to do so).
What happens if I don’t make a Binding Nomination?
The trustee distributes your benefits amongst your dependants and your estate in whatever way it believes is fair and reasonable. This is done taking into account the nomination you completed on your application form (remember though they are not bound by your nomination unless you made a ‘Binding Nomination’).