It’s generally recognised that superannuation is an individual’s second largest asset after residential property (or the family home). Yet, many Australians do not fully understand the nature of their superannuation account as it does not automatically form part of their estate.
Indications in a will of where a superannuation account is to be paid upon death are strong directions for the fund trustee to consider, but they are not binding. The trustee has the ultimate legal responsibility to pay the benefit to the appropriate beneficiary, but in some circumstances disputes do occur among family members or other potential claimants and the Trustee must decide between competing claims. This is especially true where there are blended families or previous marriages.
Valid binding death nominations remove trustee discretion and, except in rare circumstances where a court directs otherwise, must be paid to the named recipient!
A valid binding death nomination must be paid to a ‘dependant’, or a legal personal representative (executor of your will) if you wish the benefit to be paid to your estate.
A ‘dependant’ is:
• your spouse – by marriage, de facto or a registered relationship (including same sex relationships)
• your children including step children, adopted children and children of your spouse
• any other person wholly or partially dependent on you at the time of death, and
• any person you have an interdependency relationship with.
An ‘interdependency relationship’:
• a close personal relationship
• they live together
• one or each of them provides the other with financial support, and
• one or the other of them provides the other with domestic support and personal care.
So, if you want certainty regarding your super benefit or income stream account, a valid binding death nomination cannot be overridden by a trustee decision and must generally be paid to your nominated recipient.
If you would like to make a binding death nomination, download the form from the NGS Super website (www.ngssuper.com.au). When you make your nomination you have the choice of your legal personal representative (estate) or your ‘dependants’.
If you select your estate, the benefit will be distributed according to the instructions in your will if the will is uncontested. If you name ‘dependants’, you must provide their details and have the form witnessed by two individuals over 18 years of age who are not nominated as beneficiaries on the form. You will have to update the nomination every three years to ensure the details are up to date and NGS Super will send you a reminder at the expiry of the three years. Valid binding death nominations provide peace of mind and greatly assist the fund in ensuring your wishes for the distribution of your benefit are carried out.
On behalf of the NGS Super trustee, management and staff, we would like to wish you a happy and safe holiday and a well earned break!