Binding Nominations

When you die, the proceeds from superannuation may be left to either eligible beneficiaries (e.g. spouse and or children), or your Estate.

The types of nomination that are typically made are:

  • non-lapsing binding death benefit nomination
  • lapsing binding death benefit nomination
  • non-binding death benefit nomination.

A non-lapsing binding death benefit nomination provides an instruction to the Trustee that the death benefit must be paid in accordance with your nomination (providing the recipient nominated is eligible). Unless amended, this nomination would remain in place indefinitely.

A lapsing binding nomination has the same characteristics as the non-lapsing version. However, it must be updated on a regular basis (e.g. depending on the super fund, a lapsing nomination may expire every three years).

A non-binding death benefit nomination provides a directive to the Trustee as to whom you wish your benefit to be paid, however, the Trustee is not bound by this directive and has final discretion in the decision.  They would then investigate who the beneficiaries could reasonably be and make a determination based on the information they receive through those investigations.

Who can I nominate as a beneficiary?

For Superannuation purposes, the legislative definition of “dependant” describes who is eligible to receive a superannuation death benefit directly (i.e. who you can nominate as a beneficiary in your super fund).  The following table shows who qualifies as a dependant for superannuation purposes:

Dependant Eligible beneficiary
Spouse, including de facto  Yes
Former spouse No
Child under age 18 Yes
Child aged 18 or more Yes
Person in interdependency relationship Yes

What if I can’t nominate the person I wish to receive my superannuation?

If you wish for a person to receive part or all of your superannuation and they are not an eligible beneficiary according to superannuation legislation, you may be able to achieve your desired outcome by writing your wishes in your Will.  For further information, please contact us for advice about your individual circumstances.

It is important to note that superannuation death benefits may be taxed.  For further information, visit the superannuation section in our Knowledge Centre.