Even if you’re not wealthy, your estate plan should be regularly reviewed to ensure it considers your changing family situation (such as divorce or a new family member), financial assets and relevant legislation. 

A valid superannuation death benefit nomination is an important part of managing how your superannuation and sometimes even your Life insurance proceeds will be distributed after your passing.  Death benefit nominations are important for all superannuation members, whether your fund is a Self Managed Super Fund (SMSF), a retail fund or an industry fund. 

Binding vs. Non-Binding Nominations

Death benefit nominations may be non-binding or binding. A binding death benefit nomination (BDBN) is a written direction from a member to their superannuation trustee that sets out how the member wishes their superannuation benefits to be distributed. A lapsing binding nomination is generally valid for a maximum of three years and lapses if it is not renewed. If you make a non-binding nomination or no nomination at all, the trustee of the superannuation fund will have more discretion on where your money should go. 

Special Considerations for SMSF Members

If you’re an SMSF member, it’s essential to understand the specific requirements and recent legal changes that may affect your death benefit nomination. Before making or accepting a death benefit nomination you (in Trustee capacity) must check the deed of the fund and ensure the deed does not impose any limitations in members making a death benefit nomination. 

A recent decision by the High Court has changed the rules in relation to using a binding death benefit nomination (BDBN) if you are a member of an SMSF . A further recent court ruling has highlighted that not all superannuation trust deeds expressly terminate a Binding Death Benefit Nomination (BDBN) when a spousal relationship ends .

The case of Corbisieri v NM Superannuation Proprietary Limited [2023] FCA 1319 is a reminder for trustees and advisers to carefully read superannuation trust deeds. Terence Wong, a superannuation law specialist, noted, “This case reminds us to read the superannuation trust deed for the provision or obtain advice tailored to the member’s needs, objectives and circumstances, and to amend the superannuation trust deed or place a condition on the BDBN where required.”

Nominating Beneficiaries

When nominating the beneficiaries you would like to receive your super death benefit, you need to correctly fill in the necessary paperwork to ensure you provide clear instructions for the trustee of your super fund. If your nomination is not deemed valid, the decision on where your money goes will be made by the trustee.

Your benefit nomination can be renewed, changed, or revoked at any time.