DEATH BENEFIT NOMINATIONS – CLAIMING AGAINST SUPERANNUATION – It’s not as clear cut as it seems!

The trust deed establishing a superannuation fund usually provides for money to be paid by the fund on the death of a member.  The benefit does not however, technically form part of the estate of the deceased although it can often be paid to the estate or personal legal representative.   Commonly, trust deeds allow a member to nominate a person or persons to receive the death benefit directly, provided the person or persons meet the statutory requirement of a dependent.

The two forms of nomination are; Non-Binding, and Binding Death Benefit nominations.

Many members are now able to make Non-Binding Nominations of beneficiaries through the internet portal of his or her superannuation trust fund.   This type of nomination is not binding on the fund, and the trustee can effectively ignore the member’s nomination and pay the death benefit to any dependent of the deceased, or the deceased’s personal legal representative.

It is often important that the member have some certainty of payment to the nominated beneficiary.  This is often the case if the payment of death benefits from the fund to the beneficiaries forms part of a broader estate plan and strategy, or if specific beneficiaries are to be excluded from the death benefit payments.   In the case of retail and/or industry superannuation funds, the binding nomination needs to be renewed every three years or it will effectively lapse.

Binding nominations are essential to estate planning but largely depend on the rules of the specific superannuation fund.  It is important to ensure that the binding death benefit nomination form accords with the rules of the specific trust fund, and has been properly signed, dated and witnessed. Otherwise, it will likely be invalid and fail.

If you require advice in planning your estate or have a potential claim, you should contact your solicitor.   Koffels have a history of acting for clients and dependents, (often a child or children from a former relationship or marriage who have not been left with adequate provision), and of successfully claiming against superannuation trust funds.  This also provides us with an appreciation and extensive knowledge of the pitfalls of poor estate planning.