Many people are not aware that proceeds held within a superannuation fund do not automatically form part of their estate when they pass away.
It is important to be mindful of how super is dealt with on your passing as a superannuation death benefit payment forms a significant portion of most people’s assets.
The majority of super funds are a type of trust. The trustee of the trust fund is responsible for making the determination with respect the beneficiary of the death benefit payment.
Members of a superannuation fund are able to provide the trustee of the fund with their directions as to how their death benefit is to be paid in the form of a Death Benefit Nomination. These directions can be binding or non-binding.
Binding Nomination
As the name suggests, a binding nomination means that the trustee’s discretion as to how the payment will be made is removed.
Non-binding Nomination
With a non-binding nomination, the trustee can take the nomination into consideration but is not compelled to follow the direction.
How can we help?
It is prudent to seek legal advice when completing a nomination so that the payment direction fits in with your overall estate plan, taking into account factors such as the circumstances of beneficiaries , tax implications, and potential creditor claim risk.
Completing a valid nomination is critical to ensure that the document you execute gives effect to your wishes. There are certain requirements that need to be satisfied in order to complete a valid nomination and, where overlooked, can have significant consequences with respect to payment.
Contact one of our expert Wills & Estates lawyers on (02) 9964 0499 if you have any queries or wish to discuss superannuation nominations.
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The articles on this website comprise legal general information and not legal advice. The general information presented here must not be relied upon without legal advice being sought. In the event that you wish to obtain legal advice on the contents of this general information you may do so by contacting our office or your existing solicitor.