Do you have superannuation? Can you recall who you have nominated to receive your superannuation benefits when you die? Are you sure the nomination you made is valid?
If you are unsure of the answers to these questions, it is important you take the time to review your superannuation death benefit nomination.
Eligible Beneficiaries
People often assume that they can nominate any person to receive their superannuation death benefit. Unfortunately, the list of eligible people is limited. It is therefore important to check your existing nomination to ensure your intended beneficiary will actually be able to receive their benefit.
Eligible beneficiaries include:
- your spouse/partner;
- your child;
- someone financially dependent upon you at your death; or
- the legal personal representative of your estate (your executor).
Nominating a grandparent, parent, sibling, cousin, niece, nephew, boyfriend, girlfriend or friend will result in an invalid nomination if they are not a dependent.
What do I do if I have no eligible beneficiaries?
If it is your intention to leave your superannuation to someone who is otherwise ineligible, you must nominate the legal personal representative of your estate and then bequeath the funds to that person in your Will.
For example, if you want to ensure your superannuation death benefit is paid to your mother because you have no spouse or children, you must nominate the legal personal representative of your estate. You can then decide whether to gift her the proceeds in your will.
What happens if I die, and my nomination is found to be invalid?
If you have made an invalid nomination and you pass away, the distribution of your superannuation death benefit will be determined by the trustee of your superannuation fund. This may result in the distribution of funds to people whom you did not intend to receive any money.
Utilising the example from above, if your mother and father have both survived you, the trustee may choose to divide your superannuation death benefit equally between both parents even if you have been estranged from your father since birth.
As the superannuation fund will not inform you as to whether your nomination is valid or invalid, it is important you consider consulting with an estate planning law firm, such as Dillon Legal, as part of an overall review of your estate plan. Not only will we be able to assist you in ensuring a valid nomination is made, but we will also be able to provide guidance and recommendations concerning the nomination to ensure it minimises risk and maximises tax concessions.
