Ensure your superannuation will be paid to your beneficiaries

Binding nominations in superannuation funds

Australians are holding more and more of their personal wealth in superannuation. It is important to consider your binding nominations, which means who will benefit from your superannuation wealth, and any related life insurance policies, as part of your estate planning process.

Most superannuation funds allow you to nominate who will receive your superannuation when you pass away.

However, you may be surprised to know that in some cases, your superannuation fund can ignore your binding nominations

Your superannuation fund can ignore your binding nomination and pay your superannuation wealth to another person (one of your dependents) or to your estate.

Further, if you make no binding nomination, your superannuation fund will make its own decision about whether to give your superannuation wealth to one of your dependants or to your estate, with no guidance from you.

If your superannuation is paid to a person (either by nomination or by your superannuation fund just making its own decision), your Will has no impact on who obtains your superannuation wealth. Remember that even though your balance may not be high, most superannuation policies now have life insurance attached (meaning that your low superannuation balance may actually be quite high when your life insurance payout is added).

Most superannuation funds now allow “binding” nominations.  The benefit of making a “binding” nomination is that the trustee cannot ignore your wishes. 

The person who will decide who receives your superannuation (including any life insurance held within your superannuation) will be:

AssetWho makes the decision?Notes
Superannuation – where you make no nomination.The trustee of the fund.This can produce an unsatisfactory result.
Superannuation – where you make an (advisory) non-binding nomination.The trustee of the fund, but with reference ot your nomination.The trustee can ignore the advisory nomination – this can produce an unsatisfactory result.
Superannuation – where you make a binding nomination.You, through your binding nomination.You retain absolute control.
Life policy – within superannuationAs above, depending on whether or not you have made a binding nomination.The proceeds form part of the superannuation fund.

As part of proper estate planning, it is important to ensure that the nomination to your superannuation fund is consistent with your intentions in making your will.

In many instances, a binding death nomination should be made. We can assist you with this.

Making binding nominations

If you want to direct how your superannuation is distributed, you need to make a binding nomination.

Most superannuation funds now allow for binding nominations – and this means they cannot ignore your wishes.

A valid binding beneficiary nomination will ensure your superannuation will be paid to the eligible beneficiaries you nominate, as long as they are classified as a dependant or your legal personal representative, and in accordance with legislative requirements.

Have you considered superannuation in your Will?

If you can’t come to us, we can come to you

At Mason Lawyers, when someone is ready to make a Will, we consider a person’s unique circumstances on a case-by-case basis. A person’s estate can be small or large, complex or straightforward. Similarly, a person can have a very small family or a large and complicated family. These factors, as well as any insurance considerations or potential disputes, are considered when making an individualised estate plan.  Our experienced estate planning lawyers can help you make a Will. 

  • Over 20 years of Wills and estate planning experience
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