Did you know that superannuation is not generally covered by wills, unless you make the necessary arrangements with your superfund beforehand? To make sure your super money ends up in the right hands after you die, it’s important to keep your super up to date by nominating your beneficiaries.
Who gets my super if something happens to me?
Deciding who gets your super when you die isn’t as simple as having a will. That’s because
wills only cover assets you own, such as houses, cars, investments, jewellery and other personal items. Super on the other hand is held in trust for you by the trustee of the superfund.
To make sure that your super, and any life insurance you hold inside super, goes to the people you’d like it to in the event of your death, you need to keep your super fund up to date by nominating your beneficiaries. If you don’t nominate a beneficiary, your super fund may have the discretion to decide who receives the payment, regardless of what you have in your will. Making a nomination will help to give you peace of mind and to avoid family conflicts.
Who can be my beneficiary?
A beneficiary is the person or persons who receive the payout from your superfund when you die. You can nominate one or more beneficiaries if your super fund allows it. Eligible beneficiaries include:
- your spouse or partner
- your children
- anybody financially dependent on you when you die
- your estate or legal representative – known as an executor.
If you nominate your estate or legal representative, you can then specify in your will how and to who you want to distribute your super money to, which can include eligible beneficiaries (mentioned above), as well as other people in your life. It’s important that the information stated in your will is up to date, so your legal representative pays out your super money as per your instructions.
Ways to nominate a beneficiary
The way you nominate your beneficiary matters, as certain types of nominations give you greater control over who ultimately receives your super money. Most super funds will give you options, as explained here:
|Option||What happens to your death benefit?|
|Binding nominations||As the name suggests, this type of nomination is ‘binding’ on the trustee of your superfund, which means they must pay your super to the beneficiaries you have nominated and in the proportions you specify. Some binding nominations lapse after three years, whereas non-binding nominations do not expire. Remind yourself to regularly review this. The limited time frame validity of the nomination is to protect people who have a change in relationship and forget to update it before passing away.|
|Non-lapsing binding nominations||Non-lapsing binding nominations do not expire, and will continue to apply until you revoke an existing nomination or make a new one. As with a binding nomination, the trustee must pay your super benefit to the beneficiaries nominated and in the proportions specified. It is important to review your non-lapsing nomination regularly to make sure it’s still appropriate.
|Non-binding nominations||In this scenario, the trustee of your superannuation fund will consider your nomination but will have the final say as to who receives your super benefits. They will attempt to find all potential beneficiaries and decide who is the most appropriate recipient.|
What happens if I don’t nominate a beneficiary?
Depending on your superfund, the trustee will follow the relevant laws and decide who the money goes to, regardless of what’s in your will. The trustee will either pay your death benefit to your estate or it may use its discretion to determine the beneficiaries.
How do I nominate, review, change or add beneficiaries?
Contact your superfund to find out how to nominate or update your beneficiaries. If your super is with AMP, you can add or update your nominated beneficiaries at any time online through My AMP.
- Log into My AMP
- On the 'Superannuation' page, select 'Manage my beneficiaries' from the 'I want to' menu
- Add or update your non-binding or binding death benefit nomination.
- check your super fund allows binding nominations
- check those you’re nominating are eligible
- if you plan to nominate your legal representative, make sure your will is up to date
- complete and sign a binding nomination form—in the presence of two witnesses who are not beneficiaries—and send the form to your fund
- if your nomination is lapsing, make sure you review and renew it before it expires.
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