Control who will get your super

Deciding who will get your super when you pass away is called ‘nominating a beneficiary’. Without this nomination your super may be given to someone you didn’t intend it for. In one case, a man died suddenly and most of his super and life insurance pay-out went to a new partner, bypassing his children, even though he'd wanted to provide for them in his will.

These scenarios occur because super is managed by a trustee. As your superannuation is technically held in trust for you until you reach retirement it cannot be directly included in your will and isn’t part of your estate (unless you nominate a legal personal representative – more on this below). Trustees follow specific rules in allocating super to ‘financial dependents’ as outlined in the law.

The only way to take the matter out of your trustee’s hands is to choose who gets your super by making a ‘binding death nomination’ every three years.

“If you haven’t nominated beneficiaries, it could cause a great deal of stress for your family. It could also delay payment while the trustee sorts out who is technically dependent. That’s why it’s important to consider nominating your beneficiaries,” says smartMonday smartCoach Ana Soundara.

A binding nomination clearly sets out who you want to get your super and any life insurance benefits attached to it. You can only nominate people that are financial dependents, a spouse, children, an interdependency relationship or your legal personal representative.  Trustees will not accept anyone else and will need to validate the nomination at the time of death. (If you have questions about this speak to one of our smartCoaches – details below.)

If you want your super to go to someone other than a dependent, such as a brother or sister, you’ll need to choose a ‘legal personal representative’ to receive your super, who can follow your will to distribute your super and estate as you wish. This representative is usually someone appointed as the executor to your will, such as a family member.

With a binding nomination it’s important to keep it up to date as your relationships and situation change. These nominations are valid for three years and will then need to be renewed.

The other way to nominate who will get your super is through a non-binding nomination.

“The trustee will use that nomination as a guide to where you want your death benefit to go. It is not legally binding on the trustee but it’s a handy option if you want to get something in place while you consider a more permanent option,” explains Soundara.

Nominating a non-binding beneficiary can be completed online by logging into your smartMonday member portal. This smart, easy step takes less time than making coffee – but it's important to think through your choices first.

While there’s no guarantee those you nominate will get your super, this form of nomination does not expire.

Aside from your non-binding nomination, the trustee will consider your circumstances at the time of death, specific rules of your super fund, instructions in your will, and claims on your super by relatives and dependants, in deciding where your super will go.

Life can be unpredictable, but a nomination is a way to make one thing – who gets your super benefits – more certain. We’d really like to help you take care of your loved ones: to do that all we need from you is to reach out to a smartCoach or follow the steps below.