Binding death benefit nomination
Generally, without a binding death benefit nomination in place, a trustee of a fund must follow trust deed rules when deciding to whom to pay benefits. In making its decision the trustee will be guided by any non-binding nomination you may have in place plus a number of other factors including your relationship with each of your dependants, their level of dependency or inter-dependency on you, the provisions of your Will, etc. But, the final decision may not always result in the distribution of your superannuation benefit in a manner expected by your dependants.
A valid2 binding death benefit nomination removes uncertainty from the decision-making process as it binds the trustee to distribute your benefits as per your instructions. In addition, by nominating who should receive your benefit and stipulating the amount they should receive, you may save your estate from costly litigation by dependants making competing claims on your superannuation benefits.
To help ensure a binding death benefit nomination remains valid, it should be renewed every three years or whenever there is a change in the nominating individual’s relationship circumstances, whichever occurs first.
To make a binding death benefit nomination;