Contrary to popular belief, your superannuation doesn’t automatically form part of the assets in your Will. This is because Super is not owned by you personally, but rather held on Trust by the Trustee of your Superannuation Fund to distribute to you at a certain time – a piece of information that many of us don’t know.
Unlike your bank account, there are specific things you need to do in order for your beneficiaries to receive your Super.
Why can’t my Super be left in my Will?
The purpose of a Will is to distribute your owned assets to your beneficiaries when you’re gone. And as Super isn’t actually owned by you but held in a Trust. This doesn’t mean the Trust has the right to do what they want with the money, in fact, it can be distributed as you wish but you need to take some additional steps to ensure that it happens:
- Contact your Super Fund
- Prepare a Binding Nomination
What is a Binding Nomination?
A Binding Nomination is the official document needed to nominate the person or persons you’d like to receive your Super. This can also be a Legal Representative. If you do leave the funds to the latter, the balance will be managed along with your Will – providing you’ve included a Superannuation Clause in your Will.
Your Super Fund can help you to prepare a Binding Nomination.
What do I need to make a Binding Nomination with my Super Fund?
Anytime is a good time to make a Binding Nomination with your Superannuation Fund. All you need to do is provide them with the details of who you would like the beneficiary to be. Then once you’ve signed and confirmed, the agreement lasts for three years. This means that it will need to be reviewed and updated every three years to make sure it’s still valid.
There are a few things to consider when it comes to Binding Nominations:
- A Binding Nomination is only valid once it is received and accepted by the Trustee of your Super Fund;
- You’ll need to update any changed circumstances as and when needed; and
- You’ll need to update the agreement every three years.
As long as the Binding Nomination is approved, valid and up-to-date, your Super Fund will adhere to the instructions in the event of your death.
What is a Superannuation Clause?
A Superannuation Clause in your Will can be used when you’ve nominated a Legal Representative in your Binding Nomination. This ensures that your Super is paid to your estate and distributed how you wish. It’s an added clause which outlines who you’d like to benefit from your Super.
A Binding Nomination is a fast and effective way to make sure your Super goes to the people you wish it to. A Superannuation Clause in your Will cements those wishes by providing further confirmation and instruction that that’s what you want.