Arguably your superannuation will be your second largest asset, second only to your home. So who will receive your superannuation after you pass away?
Under the SIS Act regulations and rules, it is the trustee of your superannuation fund that has the discretion and responsibility to determine who the superannuation death benefit is to be paid to once a member dies. That is, if you have an AMP fund or an MLC fund for example, it is AMP or MLC who will make the decision as they are the trustee. Who is the trustee of your superannuation?
It is possible to take this decision making role or discretion away from your superannuation trustee by completing a binding death benefit nomination. Where a binding death nomination is completed correctly, the trustee of the superannuation fund is obligated to make the death benefit distribution in accordance with the nomination.
It is essential that the binding death benefit is prepared correctly and regularly reviewed.
You must ensure:
1. that the binding death benefit is signed appropriately;
2. that the binding death benefit is witnessed by 2 adults;
3. the nomination is dated and no more than 3 years old;
4. that the person you have nominated as your beneficiary has not predeceased you. This can happen where, for example, you nominate your spouse, they predecease you, but you forget to update your binding death benefit nomination.
It should also be noted that you may only nominate persons classed as dependants under the SIS Act, that is:
1. your spouse (including a defacto);
2. your children;
3. your adopted children;
4. a child that is financially dependent on you such as a step child, living with you; and/or
5. your estate.
Furthermore, there are tax implications depending on who you choose to leave the death benefit to, so it is important to seek professional advice before completion.
Here at The Quinn Group our experienced team of Financial Planners, Accountants and Lawyers can assist you with all your estate planning and retirement needs. For more advice about binding death benefits and superannuation, contact the Financial Planners here at Quinns by submitting an online enquiry or calling us on +612 9580 9166 to book an appointment.