Superannuation may be a valuable portion of your assets, however it does not automatically form part of your estate. In other words, just because you have a Will in place, does not mean that you have given directions as to your superannuation when you die – unless your Will specifically includes clauses as to superannuation.
Your directions as to what is to happen to your super on your death is given by completing and having a valid Death Benefit Nomination in place with your superannuation provider. This is also known as a beneficiary nomination or binding/non-binding death nomination.
This nomination instructs your superannuation provider as to who is to receive your superannuation entitlements upon your death.
You can nominate any person over 18 years to take all of your entitlements or you may be able to nominate more than one person. If you nominate more than one beneficiary, you will have to indicate what share of 100% they are to receive. You may also have the option to have all or part of your superannuation entitlements paid to your estate or what is otherwise known as, to your legal personal representative.
It is important to get legal and taxation advice when deciding who to nominate as your super beneficiary. The nomination can be a useful tool to avoid legal and taxation consequences.
You will have to submit your super provider’s nomination documentation directly to your superannuation company. Each superannuation provider have their own separate nomination documentation. If you need assistance, your financial planner/accountant or lawyer can assist you to complete the document.
In most cases, you will have the choice to make the nomination binding and non-binding. A non-binding nomination is simply an expression of how you wish your super to be paid and the super trustee will pay out your super in their discretion upon your death. A binding nomination is binding – that is, the super trustee must pay out your super as you have nominated. Most superannuation providers will not accept a binding nomination completed online. Such nomination forms usually have to be completed manually and posted to the provider.
A binding nomination in most circumstances will be lapsing which means you will have to renew the nomination every 2-3 years depending on the requirements of your super provider. Some organisations do allow a non-lapsing nomination which means it does not have to be renewed.
Our experienced team at Marino Lawyers can assist you with full estate planning services, including superannuation nominations. Call Marino Lawyers in Cairns today to discuss how we can assist you with this process.