This is something that we don’t often think about because we all hope that we will live long enough to enjoy the money that has been accumulating in our super funds over the years but unfortunately, history tells us that not all of us will live long enough to enjoy those funds so it is important that we look carefully at this area.
Somewhere on your super statement there will be a place that allows you to nominate a beneficiary in the event of your death. If you have not made a nomination – the Trustee of your Super Fund is bound to deal with the benefit in the best interests of the member and when deciding this, will typically inquire about the deceased’s family situation, inter-dependents,the provision of a will, etc. before making a decision. The benefit must be paid to the deceased’s dependents or their legal representative.
If you have made a Non – Binding Nomination – the Trustee handles it in much the same way as no nomination but uses the nomination as a guide only.
If you are wanting to make sure that there is no question of where the money is distributed in the event of your death – you need to make a Binding Death Nomination.
A Binding Death Nominationprovides greater certainty about who receives a death benefit in the event of a death. It is a legal nomination that “binds” the Trustee of the Superannuation Fund to pay the death benefit to the person or persons nominated and in the proportions stated – so you can actually divide the amount of the benefit between several people – your choice.
There are rules surrounding who can be nominated and the requirements needed so you may have to contact your financial adviser or super fund regarding this but I believe it is well worth your time and effort so that you can be sure those people whom you would like to see benefit from your funds are the actual ones that do so.