Let us help you safeguard your Superannuation for your loved ones.
Much to the surprise of many, superannuation benefits do not generally form part of your estate and are generally not covered by a Will. So, who you wish to receive your superannuation benefits including any insurance benefits must be specified in a binding death benefit nomination.
What is a binding death benefit nomination?
A binding death benefit nomination is a legal document that you complete and provide to your superannuation fund. It is effectively written instructions to the trustee of your superannuation fund, instructing them of who is to receive your superannuation benefits in the event of your death.
Generally, binding death benefit nominations are valid for only three years so they need to be updated regularly.
What happens if my binding death benefit nomination expires or I don’t have one?
In the event that your binding death benefit nomination has expired (or is invalid for any other reason) and you pass away, the trustee of your superannuation fund is not required to distribute your superannuation benefits in accordance with the terms of your nomination.
Similarly, if you do not have a binding death benefit nomination at the date of your death, the trustee of your superannuation fund will distribute your superannuation benefits according to the fund rules as detailed in the superannuation fund’s Trust Deed
The only way to make certain that your superannuation benefits are distributed in accordance with your wishes is to ensure that you have a binding death benefit nomination and it remains valid.
Binding death benefit nomination forms are generally simple to complete and can be found on your fund’s website or by contacting your superannuation fund.
Who can I nominate to receive my superannuation benefits?
Each superannuation fund has its own rules but you are generally able to nominate multiple beneficiaries including your spouse or de facto partner, your children or a person who is financially dependent on you.
You may also generally nominate a person in an interdependency relationship with you. This is someone with whom you have a close personal relationship and live with. You or the other person must also provide financial, domestic or personal support to the other. If you wish to nominate someone in this category, it is important to obtain legal and/or financial advice to ensure that the person meets the definition as it may have tax implications if they do not.
Some superannuation funds do not allow you to nominate a person as their fund rules state that your superannuation benefits automatically pass to your spouse. In some circumstances, this may not be appropriate so you may be able to nominate your legal personal representative. By nominating your legal personal representative, your superannuation benefits will be paid to your estate rather than to your spouse.
Is there anything else I should consider?
Depending on who you nominate to receive your superannuation benefits, there may be tax implications so you should obtain legal and/or financial advice.
You should also ensure that you have a valid Will that it up to date.
Contact us today on 8357 7611 to make an appointment with one of our friendly lawyers to discuss your binding death benefit nomination.