When it comes to estate planning, many Australians assume their superannuation will automatically be distributed according to their will. But that’s not the case and the consequences of misunderstanding this can be significant.
A recent ABC News investigation revealed that at least 6.5 million Australians may have no say in who inherits their superannuation
That’s because many haven’t made a legally binding death benefit nomination with their super fund, leaving the decision in the hands of the fund itself.
The Real-Life Impact of a Non-Binding Nomination
Kelly’s story, shared in the ABC article, is a powerful example. When her ex-husband Tony passed away, she believed their son Zac — listed as the main beneficiary — would receive the super funds. Tony had more than $600,000 in super and associated death benefits, and had nominated Zac to receive 80% of it.
But Tony’s nomination was non-binding, meaning it wasn’t legally enforceable. Another family member, not listed as a beneficiary, made a claim — and the super fund had the discretion to consider it. Zac, who lives with a disability, is still fighting a legal battle for the money meant to support his medical needs and future
Kelly told ABC News:
“We were blindsided… My child has been through so much in the past couple of years… It’s just been a really, really, really difficult situation.”
Binding vs Non-Binding: What’s the Difference?
- A non-binding nomination is easy to complete online. It records your wishes, but your super fund can override them based on your circumstances at the time of death.
- A binding nomination is legally enforceable. Your super fund must pay the money to the people you nominate, in the amounts you choose.
Making a Binding Nomination: What You Need to Know
To make a valid binding nomination, most super funds require:
- A paper form
- Your signature in front of two witnesses (who are not named in the nomination)
- Mailing the form to your fund
Most binding nominations expire after three years, and not all funds allow online renewals. That means you may need to repeat the process regularly to keep your nomination valid.
Why It Matters
Without a binding nomination, your super fund may consider other factors — such as dependants or competing claims — when deciding who receives your death benefit. This can lead to delays, disputes, and distress for your loved ones.
What You Can Do Today
At Evalesco, we believe in empowering you to take control of your financial future. Making a binding death benefit nomination is one of the most important steps in your estate planning — and we’re here to help.
- Review your superannuation nominations
- Check if they’re binding or non-binding
- Renew your binding nomination if it’s expired
- Talk to your adviser about your options
Need help sorting it out?
Let’s chat. Our team of advisers can guide you through the process and ensure your wishes are protected.
Source:
ABC online article – Millions of Australians will have no say in who inherits their superannuation
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