Binding Superannuation Nominations
By Lisa Ruggero-Salerno
A binding death benefit nomination is a nomination that legally binds the trustee of a superannuation fund to pay your superannuation benefit to any person you nominate, in the event of your death.
What a lot of people don’t know is that binding nominations are usually only valid for three years (depending on your Super Fund).
Because superannuation is such a technical area, you should contact your Superannuation Fund and check for the format they require for a Binding Nomination to be made and also how long it is valid for. You should always renew your Binding Nomination, even if it is exactly the same as you previously provided but to be prudent, you should update it every year.
Who you may nominate is also a relevant consideration as valid nominations are generally limited to people that are ‘dependents’; which includes spouses, children or any other person who was financially dependent on you. Check with your Super Fund.
We recently had a case in which the Binding Nomination had expired and the Superannuation Fund wanted to pay the monies to the Mother of the Deceased who was estranged from her son. The Mother had not even raised him, but she was the next of kin that the Superannuation Fund considered was the proper person to pay notwithstanding evidence that the Deceased had no relationship with his Mother and he had been raised by his Aunt and Uncle. This decision was appealed.
Always ask your Superannuation Fund what are their Rules in relation to distribution upon your death. Each and every Superannuation Fund is different.
If you need any assistance with Superannuation and/or Binding Nominations, please contact Lisa Ruggero-Salerno Partner on 9667 1271
Nothing in this article constitutes legal advice. Everybody’s circumstances are different and you should obtain legal advice specific to your needs.