Where will your super go if you die?
LINDA BROOKER advises on how to make sure your superannuation goes to who you intend on your death.
Life is not always straightforward due to complicated family circumstances. Only you know who you want to receive your super in the event of your death. Provide certainty for those you really care for with a will and a binding death benefit nomination for your superannuation benefits.
You can't assume your spouse or kids will automatically get your super benefit should you die. Generally, trustees of super funds have the final say when it comes time to decide who should receive a member's benefit. However, there is a way of making sure your super would be paid in line with your wishes and that is to make a "binding death benefit nomination".
How binding death benefit nominations work
First State Super allows two types of death benefit nominations -- binding or non-binding.
A binding death benefit nomination is an instruction that is legally enforceable and allows you to select (nominate) who receives your super benefit and how much each person you nominate is to receive. It means the Trustee must carry out your instructions, provided your nomination is valid, and the beneficiaries you have selected meet the definition of 'beneficiary'.
A binding nomination is valid for a period of up to three years from the date it is first signed, last confirmed or amended. It can be updated, renewed or revoked at any time.
If your binding nomination has expired or is invalid at the time of your death, the Trustee decides who will receive your super benefit.
So it's important to keep your nomination up-to-date, especially if your circumstances change due to, for example, marriage, the birth of a child, or the death of a beneficiary.
Beneficiaries -- people you can select to receive your super benefit
Only the following people may be nominated as your beneficiaries:
- your spouse
- your children
- your dependants (either financially dependent or where an interdependency relationship exists)
- your legal personal representative.
Each of these beneficiaries has a specific meaning, refer to the First State Super Product Disclosure Statement for a full explanation.
Making a binding death benefit nomination at First State Super
If you are a member of First State Super and would like to make a binding death benefit nomination you will need to complete and return the Nomination of beneficiaries form. Full instructions are on the form.
Before making a nomination, please read the information about making a nomination in the First State Super Product Disclosure Statement (PDS).
The Nomination of beneficiaries form is available from the website at www.firststatesuper.com.au go to Brochures and forms.
Other options
If a binding death benefit nomination does not suit your circumstances you can make a non-binding death benefit nomination. A non-binding nomination is used as a guide only by the Trustee in determining who should receive your death benefit.
This type of nomination is considered by the Trustee but does not have to be followed. There is no fixed term for non-binding nomination -- it remains valid as long as those nominated meet the definition of 'beneficiaries'.
If you don't make a binding death benefit nomination, the Trustee will decide on the payment of your super benefit if you die while a member of the fund.
The importance of a will
Making a valid will is the only way to ensure your assets (estate) are distributed in the way you want. It is important to a have a valid will for your non-super assets as a binding death benefit nomination only controls your super benefit. The will should cover your super benefit so that if your super is distributed to your legal personal representative (executor) they know how to deal with it.
Your super benefit will only form part of your estate if it is distributed to your legal personal representative. The Trustee may pay a super benefit to your legal personal representative, but the only way to guarantee this is if you make a binding death benefit nomination in favour of your legal personal representative.
State/territory laws determine who receives your assets if you die without a valid will (dying intestate). The legal procedures are complicated and time-consuming. Your assets will be distributed under a rigid formula regardless of your situation or wishes, and it's possible that people you never intended to benefit might end up with part of your estate.
More information
- Read Fact Sheet 18 Nominating beneficiaries
- Visit: www.firststatesuper.com.au
- Call 1300 650 873
- Email enquiries@firststatesuper.com.au.
You should seek professional advice if you are uncertain about the best way to proceed. You should also consider the tax payable on death benefits before making a binding or non-binding nomination and the need to make a will in relation to your estate.
This communication contains general information only and does not take into account your specific objectives, financial situation or needs. It is therefore important, before deciding whether to become a member of First State Super (or, if you are already a member, to continue your membership) that you consider the First State Super Product Disclosure Statement (PDS) having regard to your own situation. The PDS is available by visiting our website or by calling us. The information contained in this document was current as at August 2007. Prepared by FSS Trustee Corporation ACN 118 202 672, AFSL 293340, RSE L0002127, the trustee of First State Superannuation Scheme RSE R1005134.
Linda Brooker is an insurance specialist at First State Super.
For further information
August 2007 contents
|
Subscribe
