Superannuation Death Benefits – Prepared by Wightons Lawyers
Did you know that your superannuation benefits may not pass the way you hope they do? Superannuation does not generally form part of your estate as superannuation legislation directs that your superannuation must pass to certain beneficiaries. These are your spouse (either married or a de facto), children (including adult children), someone financially dependant upon you, and someone who has relationship of interdependency with you or your Estate (your superannuation beneficiaries). An interdependency relationship exists if there is a close personal relationship between two people, who live together and one or each of them provides the other with financial support, domestic support and personal care. If that person is not living with you then in some circumstances, such as they are living in aged care, the interdependency relationship still exists.
Unless you have made a binding death benefit nomination, the Trustees of your superannuation fund will consider who amongst the potential benefits will receive your superannuation and in what proportions. This may not be the way you hoped your superannuation would pass. Whilst there is an appeal procedure, the procedure can be lengthy and costly, and there is still no guarantee your superannuation will pass the way you wish.
A validly made binding death benefit nomination compels the Trustees of your fund to pay your superannuation as you have directed to the named beneficiary/ies and in the proportions you have directed. The beneficiaries must still fit within the category of your superannuation beneficiaries.
A binding death benefit nomination form can be obtained from your super fund. It must be signed in the presence of two adult witnesses who must also sign the form. Some superannuation providers have additional requirements such as requiring the Trustee to consent or acknowledge the nomination.
Some superannuation providers allow you to make a nomination which is not binding. This may not be clear so it is always important to check with your provider.
Standard superannuation fund binding death benefit nominations expire each three years and must be updated on expiry.
If you have a self managed superannuation fund, your fund’s Deed may allow you to make a non-lapsing binding death benefit nomination. It is important that the format of this document complies exactly with the terms of the deed.
We can help you with the preparation of your binding death nomination forms and we can make sure that the forms are prepared and signed properly.
