The Importance of a Binding Nomination in respect of your Superannuation
This ABC News article highlights the importance of a Binding Death Benefit Nomination (Binding Nomination) in respect of your superannuation (super).
Despite the belief or expectations of many people, the trustee of your super fund is not bound by your Will.
The only way to force the trustee of your super fund to pay your Death benefits as you want is to make a binding nomination.
In almost every case, the nomination of beneficiary you make when you join your super fund or that you make online will not be binding on the trustee.
This is because a binding nomination must be made in a similar way to your Will. Two independent witnesses and you must all sign the nomination and witness each other signing.
You must also be careful about who you nominate to receive your super Death Benefits because the legislation limits the classes of people you can make the trustee pay your Death benefits to.
It appears from the ABC News article that the documents the husband “always dutifully signed” to say his wife was to inherit his super after his death were “non-binding” nominations.
This means the trustee of his super fund did not have to pay his Death Benefits to his wife and had to determine how the Death Benefits should be paid. In these circumstances the super trustee will require a lot of information about the family and dependants of the deceased member before making a decision. This can be a long, drawn out process, in our experience, often taking 6 months or more.
A binding nomination substantially reduces this timeframe and the amount of back and forth required with the super trustee, in our experience.
Many of our clients find it convenient to have us draw or update their binding nominations and witness them when they make or update their Wills and other estate planning documents.
If you have any questions regarding binding nominations or any aspects of estate planning, please contact our friendly team today.
This article is general in nature and does not constitute legal advice. If you require legal advice in relation to your personal circumstances, you must formally engage our firm, or another firm to provide legal advice in relation to your matter. Bradley & Bray lawyers takes no responsibility for any use of the information provided in this article.
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