Binding Death Benefit Nominations & Estate Planning

When planning for the future, many people focus on making a Will to ensure their assets go to the right people. However, superannuation is often overlooked, and is not automatically covered by your Will. In Queensland, and throughout Australia, your superannuation is managed by a super fund, and that fund has discretion over who receives your death benefit unless you have a binding death benefit nomination (‘BDBN’) in place.

A BDBN is a legal document that tells your super fund who you want to receive your superannuation benefits when you die. If it is valid and current, the super fund is legally required to follow your instructions. This gives you greater control over where a significant portion of your wealth will go.

You can only nominate certain people to inherit your super under a BDBN:

– Your spouse or de facto partner;

– Your children (of any age);

– Someone who is financially dependent on you;

– Someone with whom you have an interdependent relationship;

– Your legal personal representative (usually the executor of your Will).

Nominating someone outside these categories may make the nomination invalid.

Without a BDBN, the trustee of your super fund decides who gets your super, often choosing between your dependants or your estate. This can lead to delays, disputes, or unintended outcomes.

However, there are some important factors to note:

– Expiry: Many BDBNs expire after three years, unless your fund allows for non-lapsing nominations. It is important to review and renew them regularly.

– Form and Signing: BDBNs must be completed on the correct form, signed in front of two witnesses, and submitted to the fund.

– Estate Planning Integration: BDBNs should be reviewed alongside your Will and other estate planning documents to ensure everything works together.

Superannuation can be one of your largest assets. A valid binding nomination ensures it is distributed according to your wishes and can help prevent family disputes. For a complete and effective estate plan, it is essential to consider how your superannuation will be dealt with and to seek legal advice if you are unsure.

Madeline Crnkovic, law student and Paralegal at Zande Law Solicitors, Suite 9, Norwinn Centre, 15 Discovery Drive, North Lakes, is the author of this article, training in the area of Wills and Estates.

The information in this article is merely a guide and is not a full explanation of the law.  This firm cannot take responsibility for any action readers take based on this information.  When making decisions that could affect your legal rights, please contact us for professional advice.