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Member Nomination of Beneficiaries
Consideration of what happens to a superannuation benefit in the event of a member’s death is an important aspect of estate planning. Each member may nominate the beneficiary to whom any benefit is to be paid in the event of their death. Under superannuation law a death benefit can generally only be paid to a dependant of the member or the legal personal representative of the member. A dependant includes the spouse, any child of the person, or any person with whom the person has an interdependency relationship. It is important to note that taxation law defines dependants differently and thus different beneficiaries may have varying tax treatment on superannuation death benefits that they receive. Three nomination options exist:

  • Non-Binding Nominations
    A Non-Binding nomination is a guide to the trustee as to whom any benefit should be paid to in the event of the member’s death. The trustee’s are not legally required to follow this nomination.

  • Lapsing Binding Nominations
    A Binding Nomination must be adhered to by the trustee, and lets you name those dependants to whom the benefit must be paid in the event of the member’s death.
    Most Binding Nominations expire every three years and it is important that members ensure their nominations are up to date or amended if circumstances change.

  • Non-lapsing Binding Nominations
    It is possible to have a non-lapsing binding nomination in certain circumstances permitted by the Trust Deed of the superannuation fund. There is no requirement to renew these nominations however we suggest that the implications be discussed with your adviser before putting into place this type of nomination.

If you wish a pension to automatically revert on death then a binding nomination should be made.

Disclaimer: The information contained in this document is given in good faith and has been prepared from information believed to be accurate and reliable. This information is of general nature only and based on Multiport’s interpretation of the present laws but no guarantee is provided. This document is not designed to be a substitute for financial or investment advice and should not be relied upon as such. Reproduction of material in this document is only permitted with approval of the author.
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