Who Can I Nominate My Super To?
“Who can I nominate my Super to?”
The trustee of your superannuation fund (industry super, a retail super, or potentially yourself in a self managed super account) will be the authority to make this decision. Therefore, it is imperative to give them precise instructions should you not live to your expiry date.
Most people would like to know, if they passed away, the money they had in superannuation would go to the people they wanted.
Anecdotally, I’m struck by the fact that about 60% of people I see have no idea who the money is going. Or, if they have made any nomination whatsoever.
Death benefit nominations – binding and non-binding
First, and this can get a little complicated here, you should find out what’s available from your super fund.
Often super will allow one of two types of nominations, either binding or non-binding. But, what does each actually mean?
Non-binding nominations –
The most common form is a non-binding nomination. The advantages are that often, there’s no expiry date. So, it can be a set and forget if your wishes and dependants don’t change in life.
One big disadvantage to note however goes back to the trustee. There is no binding agreement or requirement for the trustee to take your nomination into account. They can still choose to pay either your estate or another person of their choosing.
Binding nominations –
Trustees MUST pay the nominated beneficiary if a correct and valid binding nomination has been made. This gives you a lot more certainty, however there’s some things to note:
- You must sign the nomination in front of 2 adult witnesses (in most cases);
- The binding nomination through many super funds is only for 3 years, which means you need to re-submit every 3 years; And
- The nomination must still be to someone valid.
So, who is a dependant?
Your nominated beneficiary has to be someone that is a SIS Act (Superannuation Industry (Supervision)) dependant. Such as, your spouse or defacto spouse, a financial dependant, children or your legal personal representative (think, your estate).
But I have a will, so no worries right?
Different to your will, a binding beneficiary nomination is less likely to be disputed in court, and thus can provide some surety around your wishes.
Some trustees are even allowing non-lapsing binding nominations. But, for the most part, it’s still worth looking in to and checking every three years. If your kids forget your birthday, you want to be sure to pay them back appropriately….
Seek Financial Advice
Given that a large proportion of many peoples’ net assets are held in superannuation today, nominating who you want to get your money in the unfortunate event of your passing, should be seen as a necessity.
Nominating a beneficiary should form part of an overall and broader estate plan to make sure the right people get the right money at the right time. Including taking in to consideration how superannuation benefits can be taxed when paid to your beneficiaries.
A good financial planner should be able to help formulate a plan for you.
Superannuation Fund Review:
Ultimately, the trustee of your superannuation fund (industry super, a retail super, or even potentially yourself in a self managed super account) will be the one that makes the decision. So, it’s probably worth giving them some direction around where you’d like the money sent to if you don’t make it to your expiry date!
Disclaimer: The information provided on this website has been provided as general advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of your Synchron Adviser before you make any decision regarding any products mentioned in this communication. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither Mirador Wealth Management, Synchron, nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information. Authorised Representatives of Synchron AFS Licence No. 243313