Australians have more than $3 trillion in superannuation accounts. It’s an important part of many people’s overall wealth.
If you die before you can access your superannuation, or before you’ve accessed it all, who your superannuation savings go to will be important. If you have insurance through your superannuation fund who these benefits are paid to will also be important.
Unlike the other things you own, superannuation is not normally considered part of your estate. It’s a bit complicated, but this is because your superannuation is held in a trust rather than being directly owned by you. This means that when you die the trustee of the trust can decide who your super and any insurance benefits in your super fund will be paid to.
Chances are the trustee will make sensible decisions about who to pay this money too, but you can provide clarity and certainty about what you want to happen by nominating one or more beneficiaries.
How do you nominate a beneficiary?
Check your superannuation fund’s website or get in touch with them to nominate beneficiaries. In most cases you’ll be able to do it online (for non-binding nominations – see below for details) or using a form (for binding nominations – see below for details).
Who can you nominate as a beneficiary?
You can nominate the following people as a beneficiary:
- your spouse or partner
- your children
- interdependent (people you have a close personal relationship with including financial and domestic support and personal care)
- other financial dependants
- your estate or legal personal representative (in which case your super money will be dealt with through your will)
What are the different types of nominations?
There are a number of different types of nominations you can complete. You should check with your fund to see which ones they support. The main ones are:
Non-binding nominations – as the name implies with a non-binding nomination you tell your super fund who you would like your super money to be paid to, but the super fund retains the responsibility for making the final decision about who it is paid to. With this type of nomination it’s possible that your super fund will pay your money to beneficiaries other than the ones you nominate.
Binding nominations – with a binding nomination your super fund must pay your super money to the beneficiaries you nominate, provided the nomination is valid and still in force. Binding nominations are usually only valid for 3 years from the date they are signed – so you’ll need to renew these every year if you select this option.
Reversionary nominations – if you are receiving a pension payment from your super fund and you die a person you nominate as your reversionary beneficiary will continue to receive your pension payment. There can be tax and social security implications of nominating someone as a reversionary beneficiary so talk to an adviser or your fund to understand the implications of this.
About MoneyBrilliant and how we can help
At MoneyBrilliant we believe that when people make better decisions about their money they live better lives. We can help you get your finances sorted, understand your spending, find banking products that will earn you more or cost you less, set savings goals, build a plan to own your home, track important insurance details, get your debt under control and build a retirement plan. MoneyBrilliant Plus customers can also join our money coaching programs. Whatever your starting point, we can help.
This summary has been prepared by MoneyBrilliant Pty Ltd (AFSL 492711, ACL 493068). The information in this summary is of a factual and general nature only. We are not suggesting or recommending that you take any particular course of action in relation to any financial product or service. It does not take into account your personal circumstances or objectives. If you need financial advice or taxation advice you should seek advice from a licensed financial adviser or tax agent. You may also be able to access additional information from the websites of the Australian Securities and Investment Commission (ASIC) and the relevant product providers.