Unless you have made a valid Binding Death Benefit Nomination (BDBN), the trustee of your super fund will have discretion as to whom your superannuation (including any life insurance) is paid to and in what proportions.

This is not the same as the beneficiary nomination you make when you set up your superannuation. A BDBN is a separate document to your will and as such the trustee of your superannuation fund is not bound by the terms of your will.

It can only be made in favour of your spouse, defacto partner, children, someone who is financially dependent on you at the time of your death, someone in an “interdependent” relationship with you at your death or your legal personal representative (the executor or administrator of your estate).

Some super funds do not allow the creation of a BDBN. If your superannuation fund is one of these it may be worth considering changing your Superannuation company.

Who should I make my BDBN in favour of?

Who you favour in you BDBN will depend upon your personal circumstances and the conditions of your super fund. For example, some funds may not allow you to make statements such as the following: “I leave 100% of my super to my spouse, however if my spouse dies before me then I wish for 100% of my super to be equally between my children”.

One of the other considerations is if you have grandchildren you want to benefit from your super.

Is there anything else I should know?

It is important remember that your BDBN will not be valid unless you meet the conditions as states earlier. Also, many BDBNs need to be renewed or confirmed every 3 years and will not be valid if not renewed or reconfirmed. If you have your own Super Fund you can modify the documentation such that the notice does not lapse.

Furthermore it is vital that your nomination is correctly completed and witnessed and that the correct terms are used, for example ‘legal personal representative’ should be used instead or ‘trustee’ to comply with definitions in superannuation legislation. Failure to do this may render the BDBN invalid.

The trustee of your super fund will have discretion as to who your super is paid to and in what proportions if your BDBN is not valid.

If you have any questions about Binding Death Benefit Nominations or would like to create one, free to contact me at John@gpla.com.au or call (07) 5444 1022 to book an appointment.

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