Have you got a Superannuation Binding Death Benefit Nomination in place?

A deceased’s assets other than superannuation are generally distributed in accordance with your Will. As superannuation is held in a Trust (The Superannuation Fund) it is not automatically included as an asset in a deceased’s estate. Accordingly you can’t actually leave it to anyone in your will.

Instead you can make a Superannuation Binding Death Benefit Nomination through you Superfund thus enabling you to direct your superannuation death benefits to your preferred dependant, rather than leaving it to the trustees discretion to distribute your superannuation assets.

There are broadly four types of Death Benefit Nominations but the one we are covering today is a Binding Death Benefit Nomination. A Binding Death Benefit Nomination is a legal document that individuals can make to specify who should receive your superannuation benefits in the event of your death. These benefits typically include the balance of the super account and any associated insurance payouts.

Here's how a Binding Death Benefit Nomination works:

1.   Nomination of Beneficiaries: When you have a superannuation fund, you can nominate one or more beneficiaries who will receive your super benefits upon your death. Beneficiaries are limited to your spouse, your children, your Estate or in rare cases to other dependents who are financially dependant on you.

2.   Binding Nature: What makes it "binding" is that when you make a binding death nomination, the superannuation fund trustee is legally obligated to distribute your super benefits to the nominated beneficiaries as specified in the nomination form. This provides a level of certainty and ensures that your wishes are followed.

3.   Validity Period: Binding Death Benefit Nominations previously had a validity period of three years. This meant that you needed to review and renew the nomination regularly to ensure they remained up-to-date and reflected your current intentions. Now most Superannuation Funds Binding Death Benefit Nominations can be made as non-lapsing, meaning you only need to do a new one when you want to change it. If you have made a Binding Death Benefit Nomination previously it is important to check if its lapsing or non-lapsing.

4.   Legal Assistance: While you can complete a Binding Death Benefit Nomination form on your own, seeking legal advice or preparing this in conjunction with your will is important to ensure that the document meets all legal requirements to be valid and is consistent with your overall estate planning strategy.

It's important for individuals to be aware of and understand the rules and regulations surrounding superannuation and death benefits in Australia. Making a Binding Death Benefit Nomination is a proactive step in taking control of the distribution of your super benefits, providing peace of mind that your wishes will be honoured after your passing.

Please call and Wills and Estates Team if you have any questions about completing your Binding Death Benefit Nomination.