Who Inherits my Superannuation?
The determination as to who receives the superannuation entitlements of a deceased person is generally left to the trustee of the superannuation fund, however the trustee may be obliged to follow a binding nomination by the member of the fund if the rules of the fund allow this to occur.
Whilst most funds allow members to nominate who will receive their superannuation death benefits there are strict rules governing the making of such nomination and it is often the case that although a member thinks they have sufficiently attended to nominating a beneficiary for their superannuation the fact is that no valid nomination has been made and the trustee has a discretion to disregard it. It is important therefore that you carefully consider the rules of your superannuation fund when making a binding nomination so as to ensure that it is prepared, executed and witnessed in accordance with the rules of the fund and with the legislative requirements. In making a binding nomination you need to be aware that you may only nominate persons classed as dependents under the superannuation laws which are:
- Your current spouse (including a de facto spouse);
- Your child or children of any age (including adopted children);
- A person financially dependent on you at the time of your death; or
- Your estate, by way of a nomination to your legal person or representative.
In many cases the rules of superannuation funds provide for a binding nomination to lapse after a period of time, usually three years, so it is important that you check to see if this is the case with your superannuation fund and that you periodically update your nomination if necessary.
If you have a self-managed super fund you should check carefully the terms of the Trust Deed relating to that fund as to whether a binding nomination can be made and ensure that you follow the provisions of the Deed in making such nomination. If there is no provision for the making of a binding nomination in the Trust Deed you should seek advice with a view to amending the Deed to make provision for this.
If you would like further information on binding nominations from super funds, please contact us.