“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.”
- Robert Kyosaki
With many disputes over the validity of Binding Death Benefit Nominations in super, it’s vital that you ensure your nomination is sound.
A Binding Death Benefit Nomination is a legally binding instruction provided by you to the trustee of your super fund, outlining how and to whom you would like your super to be paid to in the event of your death. For the binding nature to be upheld, your nomination must be valid.
If you wish to nominate your beneficiary to receive a pension or income stream rather than a lump sum, they must be a financial dependant, which can include any of the following:
- Your spouse;
- Your child/ren:
- under 18; or
- if over 18 and under 25 and financially dependant; or
- is disabled
- financially dependant; or
- in an interdependent relationship with the deceased.
If you simply wish to nominate for your beneficiary to receive your superannuation as a lump sum, then you can include your children of any age and/or your Legal Representative, which would in effect direct the funds from your superannuation to your estate, and dealt with in accordance with your Will. If you opt for this strategy, it’s obviously important for you to have an up-to-date Will in place.
Some of the pitfalls that we see with Binding Death Benefit Nominations include:
- Failure to fill out the forms correctly – many will be rejected if they are not completed correctly.
- Regular reviews of your nominations
- Failure to update the Will when a Legal Representative is nominated as the Beneficiary
- Failure to update the nomination within 3 years, as they will expire every 3 years.
The alternative to a Binding Nomination is a Non-Binding Nomination, which simply conveys your wishes to the Trustee of your super fund, however they are not bound to carry out your instructions.
If you’re unsure of whether your Binding Death Benefit Nomination is in place, up-to-date and free of any errors, please feel free to contact me and allow us to conduct a complimentary ‘Super Audit’ for you.
To your financial success!
Jarrad Brown is an Australian-trained and qualified Fee-Based Financial Planner with Australian Expatriate Group, division of Global Financial Consultants Pte Ltd providing specialist financial advice and portfolio management services to international and local professionals in Singapore. Jarrad Brown is an Authorised Representative of Global Financial Consultants Pte Ltd – No: 200305462G | MAS License No: FA100035-3
Australian Expatriate Group is licensed by Global Financial Consultants in Singapore, with a team of Australian-trained, experienced and qualified professionals, allowing us to provide specialist advice to Australians living abroad.
To learn more about how we may be able to help you, please contact us:
✆ +65 8282 5702
To discuss how these changes affect you, click here to book a complimentary consultation: http://bit.ly/Book-Your-Consultation
General Information Only: The information on this site is of a general nature only. It does not take into account your individual financial situation, objectives or needs. You should consider your own financial position and requirements before making a decision.
*Please note that Jarrad Brown is not a tax agent or accountant and none of the content outlined here should be taken as personal advice. You should consult your tax agent and financial adviser to review your current personal finances and financial goals to consider whether this strategy is appropriate for you.