Understanding Super Binding Death Benefit Nominations: Why They Are So Important

When it comes to your super, many people assume that their Will automatically covers who receives these funds. However, superannuation is not automatically covered by your Will. This means that without careful planning, your super may not end up with the people you intend.

Non-Binding vs Binding Nominations

You may have heard of death benefit nominations. It’s important to understand the difference:

• Non-binding nominations: These indicate your preferred beneficiaries, but your super fund is not legally obliged to follow them. The trustee can exercise discretion, and the funds may be distributed differently than you intended.

• Binding nominations: A binding death benefit nomination legally requires the super fund to pay your benefits to the nominated beneficiaries, provided the nomination is valid and current.

  
  

For peace of mind, it’s often wise to consider making a binding death benefit nomination.

Keep Your Nominations Current

Life changes such as marriage, divorce, the birth of children, or the passing of a beneficiary can affect your wishes. If you already have a binding death nomination in place, it’s essential to review it regularly to ensure it reflects your current intentions.

The Bigger Picture: Wills and Insurance

A binding death benefit nomination is just one piece of your financial puzzle. Before finalising your nominations, it’s important to:

• Have a current Will: Ensure your Will is up-to-date and aligns with your super and estate plans.

• Review Life and TPD insurance: Check that your insurance cover is adequate, and beneficiaries are correctly named.

  
  

We recommend reviewing your superannuation, Will, and insurance together to ensure your wishes are clearly documented and legally enforceable.

Let us know if you have any questions in this area.