Nominating beneficiaries

Did you know?

Superannuation is the second largest asset for most Australians, after their family home?

On your passing, your super doesn’t form part of your estate. You need to specifically nominate where you’d like it to go.

Who can I nominate to receive my super?

You can nominate a dependant (as defined in super law) or your estate.

Dependants:

• your spouse (including de facto spouse)
• your children (including adult, adopted and step children)
• anyone financially dependent on you at the time or your death; or
• anyone you have an interdependency relationship with at the time off your

Estate

If your desired beneficiary is not a dependant (eg sibling, parent) you can nominate your estate to receive the funds.

Funds will then be distributed as per your will so make sure your will reflects your desired instructions.

How do I make a nomination?

You need to tell the superannuation fund’s trustee how you would like your super distributed on your passing; they will normally provide you a standard form to do this. You have the choice of making your nomination binding or non-binding.

Non-binding nominations

Your instructions are given consideration, but are not binding on the trustee. This means they can choose to distribute your superannuation differently from your instructions.

Binding nominations

The trustee must pay the nominated beneficiaries as directed by you, as long as your nomination is valid and your beneficiaries qualify as dependants at the relevant time.

A binding nomination generally speeds up payment of benefits and provides certainty your wishes are carried out.

Tell me more about binding nominations

In most super funds a binding nomination is only valid for up to 3 years from the date of signing the nomination form. During this time, a binding nomination can become invalid under certain circumstances, including:

• marriage
• divorce; or
• death of the nominated beneficiary.

It’s important you review binding nominations regularly and update as your personal circumstances change. You can cancel or change your nomination at any time.

A final note…tax considerations

The definition of a dependant under tax law is different from that under superannuation law. Depending on how your super benefits are paid, and whether they are paid to a tax dependant or not, will impact the tax payable. As a general rule:

• Paid to a tax dependant directly from the fund…tax free.
• Paid to a non-tax dependant directly from the fund…tax payable on certain components.
• Paid to your estate then to a non-tax dependant…tax may be payable.

This is a very simplistic overview, in reality, it can be quite complex. But don’t worry, we can help you set up and manage your nominations.

A quick look at super and tax dependants

*Unless also financial dependant or interdependent

If you would like to review or update your beneficiary nominations, please contact us. Our team would be pleased to assist you.