Who should I name as my Superannuation beneficiary?

Who should I name as my Superannuation beneficiary?As part of our estate planning services, we will talk to you about your superannuation and if you have a binding death benefit nomination in place.

Generally, your superannuation does not form part of your estate and is not distributed under your Will. If you do not have a binding death nomination in place upon your death the trustee of the super fund will make a determination as to who to pay a death benefit to, this determination will be in accordance with the governing rules of the fund and the relevant law.

You can direct the trustee who to pay your death benefits to by making a binding death benefit nomination. In order to make a valid nomination, your beneficiary must be a dependant. According to superannuation law, a dependant is defined as:

  • a spouse (including a de-facto partner)
  • children of any age (including adopted or ex-nuptial)
  • any person(s) financially dependent on you
  • any person(s) in an interdependent relationship with you
  • your Legal Personal Representative (ie the named Executor(s) in your Will in their role as your Executor, this is how your death benefits can be distributed in accordance with your Will)

If there are regular bills and payments (ie mortgage repayments) that would be difficult for your spouse to continue making upon your death, it can be helpful to nominate your spouse as the beneficiary so they receive the money directly instead of it going through the estate. This is because the super trustees generally make the death benefit payments more quickly than the process of obtaining a Grant of Probate.

You can also nominate multiple dependants and specify the percentages they are to receive.

If you do not have any dependants or if the person you wish to have your super death benefits paid to is not a dependent, you should nominate your Legal Personal Representative and then make a gift of your death benefits in your Will.

Your super company’s website will provide you with information on how to make a binding death benefit nomination. Your nomination will either need to be renewed every three years or you may be able to make a non-lapsing nomination.

You should review your binding death benefit nomination if your circumstances have changed, for example, if you have recently separated or your nominated beneficiary has become bankrupt.

If you have put an Enduring Powers of Attorney in place, you should also consider whether your Attorney can renew, change or revoke your nomination. This can be useful if circumstances change but you have lost capacity (for medical reasons) to make those changes yourself.

If you would like more information about binding death benefit nominations or your estate planning, get in touch with our friendly team and they will be able to help you out.