As some of you may know I recently got married to my lovely wife Katie. Well she’s been running around the city this week changing her name at the bank, Medicare, DTED, Electoral Office and what not. She’s also had to change her name with her superannuation fund. This prompted me into the realisation that we’d have to look at our beneficiary nominations. Being newly weds it is only natural that’d we’d now elect each other as beneficiaries in case the worst were to happen. Would it surprise you if I told you I have come across clients with ex girlfriends, ex husbands, deceased siblings and estranged high school friends as their beneficiaries?
My question to you today is; who’s going to get your super if you die?
For members of big superannuation funds (Self Managed Super Funds are a whole other ball game) there are three main types of beneficiary elections you can make:
Binding
These nominations can be binding on the trustee and thus provide the member with some level of certainty that this nomination adhered to. Such nominations also provide for expeditious payment of benefits. Unfortunately these nominations must be renewed every three years to remain valid and can still be challenged in court
Non-Binding
These nominations do not oblige the trustee to follow the nomination; they are merely recommendations as to the member’s wishes. Such nominations are easily contested and may create delays in the payment of benefits. One advantage is that unlike binding nominations, there is no obligation to renew these nominations regularly.
Legal Personal Representative
The previously mentioned nominations are dealt with exclusive of the will, however a fund member can elect to have their superannuation entitlement paid to their estate to be distributed in accordance with the will.
So when your 2010 superannuation statement comes in the post soon, instead of filing it in the bin; why don’t you actually open it. Take a peak at the balance and have a look at who you nominated as your beneficiary all those years ago. If it’s not who you want it to be, it may be worthwhile updating your nomination.
Chris Hooper
(Shutup and Save)