Superannuation needs a binding death benefit nomination

Commonly people draft a Will leaving everything to their significant other or their children believing that their superannuation will be covered in the Will. Unfortunately, this is not always the case.

Due to how superannuation is structured (by a trust) the money in your superannuation fund, and any benefits attached, are funds which are held by the trustee and not you. Even though you have contributed to these funds over the years, they are not technically in your name, they are in the trustee’s name. This means these funds are treated differently to the assets which you might own in your own name, and so won’t automatically be gifted through your Will.

 How can I make sure my significant other or child receives my superannuation?

To bequeath your superannuation you must make a Binding Death Benefit Nomination. A valid Binding Death Benefit Nomination binds and directs the trustee of your superannuation fund to pay your superannuation and any of the benefits you have to the nominated person. Care must be taken to make sure that the Binding Death Benefit Nomination is valid. If the Binding Death Benefit Nomination is not valid or binding the trustee of the superannuation fund can decide who receives your superannuation.

 Who can I nominate in my Binding Death Benefit Nomination?

For your Binding Death Benefit Nomination to be valid you must nominate your spouse, child, a dependant, or legal personal representative. You can give a percentage to multiple nominees, so long as the total gift equals exactly 100%.

Can I give my superannuation to my executor and gift it under my Will?

Absolutely. On your Binding Death Benefit Nomination you may nominate your executor (your legal personal representative), so that you can gift your superannuation through your Will. You may choose to do this if you wish your superannuation to go to someone who is not an eligible nominee on the Binding Death Benefit Nomination form (such as a friend or a charity). Be careful, however, as there are tax consequences for gifting your superannuation to someone who is not your dependant.

You are one of a kind

Everyone’s situation is unique, which is why we recommend you create an Estate Plan unique to you. By tailoring your Will and Binding Death Benefit Nomination specifically to your needs, you can be sure that your loved ones are being looked after.