Superannuation

Australians continue to build their personal wealth in superannuation. However, despite this, many Australians do not have a complete understanding of what can and will happen to their superannuation when they pass away.

As part of your estate planning, it is important to consider making a binding death benefit nomination so that your superannuation wealth, and the proceeds of any related insurance policies, will be distributed in accordance with your wishes.   

What is a binding death benefit nomination and why do I need one?

A binding death benefit nomination is a legal document that requires that the trustee of your superannuation fund to distribute your death benefit to your nominated beneficiaries. Without a binding death benefit nomination, your death benefit could be paid to your dependents, next of kin or to your estate – not necessarily as you specifically direct.

It’s important to know who will be in charge of deciding who gets your superannuation and any life insurance held within it. The person who will make this decision is:

Having a valid and binding death benefit nomination in place provides certainty for you and your family about who is going to benefit from your superannuation and any associated insurance. It also assists in how quickly your superannuation fund can distribute the funds.

How do I make a binding death benefit nomination?

In order for a nomination to be binding it must be ‘valid’. In order to be valid, the nomination must be:-

1. Must be in writing, usually in the form required by your particular superannuation fund.
2. Must be signed and witnessed by 2 adult witnesses that are not beneficiaries.
3. Must nominate a beneficiary who is a dependant.
4. Be sent to the trustee of the superannuation fund.

Who can I nominate?

Only a ‘dependant’ can be nominated. A dependant in superannuation legislation means:-

• a spouse or de facto partner
• children
• anyone who is in a financially dependent relationship with you
• any person who is an interdependent relationship with you
• a legal personal representative.

Your children can be appointed even if they are not adults at the time when you are making your nomination.

Can I do it myself, or can you help?

Doing the paperwork and signing the forms is not necessarily difficult – but it is important to have a complete understanding of your specific circumstances and your whole estate plan when making the decision about who to nominate, or even whether a binding death benefit nomination is appropriate for you.

In some circumstances, it may be better not to have a binding death benefit nomination in place. For example, if you have a binding death benefit nomination in place appointing your spouse, even if you separate prior to your passing, your superannuation will flow to them, even though they are now your ex-partner. A non-binding nomination gives the trustee the discretion to take into account changing circumstances.