It’s critical to pre-plan who and how your superannuation benefits should be distributed in the event of your death.
Interestingly, many people forget to update their nominated beneficiaries when their circumstances change, for example, if they marry, have children or divorce.
Some super funds have an option to make a binding death benefit nomination. A valid binding death benefit nomination brings more certainty as to who and how benefits are received on death. They must be:
If a binding nomination has not been used, and if the trust deed does not instruct the trustee otherwise, the trustee must use its discretionary powers to determine who is to receive a member’s death benefit.
Generally, where there is a valid binding nomination in place, on the member’s death the trustee’s discretion is removed and the payment is made as you have nominated. This may suit people who have more complex family relationships. In addition, by removing trustee discretion, it may help expedite the distribution of superannuation benefits to the intended (nominated) beneficiaries.