For many Australians, their superannuation savings may be one of their most substantial (if not often thought about) assets. Unlike other assets though, your superannuation benefits do not automatically form part of your estate when you pass away, and so cannot be disposed of through your Will.
In order to properly ensure that your super goes where you want it to, you need to make a binding death nomination with your superannuation fund. This is normally quite straightforward to do, and can be done online through your super account.
To make a binding death benefit nomination, follow these steps:
Contact your super fund to obtain the necessary forms for making a binding death benefit nomination and review the fund's Binding Death Benefit Nomination (BDBN) form and eligibility criteria.
Complete the form, nominating either eligible dependants (e.g., spouse, children) or your Legal Personal Representative (executor) as the beneficiary. When nominating an LPR, ensure you nominate the role of the executor rather than a specific individual's name.
Submit the form to your super fund and confirm its acceptance.
Periodically review and update your nomination to ensure it remains valid and reflects your current wishes.
The death benefit includes the total amount of money in your super account at the time of death plus any life insurance cover through the super fund.
If you do not make a binding death nomination, the trustee of the superannuation fund will usually decide whether the benefits are paid directly to one or more of your dependants, or to your estate.
If you nominate your Legal Personal Representative (executor) as the beneficiary, the superannuation benefits will be directed to your estate and distributed according to your Will. This ensures that your wishes are followed and provides clarity for your executor. Additionally, instructions in your will regarding superannuation are not legally binding unless your binding nomination directs the benefits to your Legal Personal Representative.
Additionally, when nominating an LPR, it is important to note that you are nominating the role of the executor rather than a specific individual's name. This ensures that the executor, as designated in your Will, will manage the distribution of your superannuation benefits.
For super death benefits, dependants will include:
your spouse (including de-facto partners)
your children
people with whom you had an interdependency relationship
people who depend on you financially
FAQs
Does my will affect the beneficiaries I’ve nominated for my superannuation? No, your will does not control superannuation unless your binding nomination directs it to your Legal Personal Representative.
Should I nominate my children directly or through my executor? You can either nominate your children directly as eligible dependants or nominate your Legal Personal Representative to distribute the superannuation through your will.
How do I nominate my Legal Personal Representative (LPR)? When nominating an LPR, you should list the role of the executor rather than a specific individual's name. This ensures that the executor designated in your Will can manage the distribution of your superannuation benefits.
If you are unsure of how your superannuation or death benefits will be dealt with or you require further information about binding nominations, we recommend that you seek independent advice from your superannuation provider and/or a suitably qualified legal professional, and, if necessary, consult with a financial advisor.
Regularly review your superannuation nominations to ensure they align with your estate planning goals. Keep them up to date, especially after major life events such as marriage, divorce, or the birth of a child. Additionally, consider listing your superannuation in your Will’s asset inventory to help your executor manage this asset effectively. However, note that listing superannuation in your Will does not control its distribution unless your binding nomination directs it to your Legal Personal Representative.
Special Cases
Defined Benefit Pensions: These are typically governed by the fund’s rules and may automatically revert to a spouse. They cannot usually be directed through a will or binding nomination.