What happens to your super when you die?
Your super might be one of the biggest assets you accumulate over your lifetime. But what happens if you pass away with super left in your account?
While your superannuation account might seem like another bank account, you might be surprised to know that you do not personally own your superannuation account. Instead, your super is held on trust by the trustee of your super fund.
This means that unlike other assets which you may have included in your will – such as a car or house – it will be the trustee that makes the decision about who will receive your superannuation and any relevant insurance payout (known as a superannuation death benefit) in the event that you pass away.
If you would like to have a say on who receives your superannuation death benefit payment when you die, you can complete a beneficiary nomination form and submit it to your superannuation fund. Depending on the types of beneficiary nominations allowed by your super fund, which form you complete, and whether your nomination is current at the date of your death, the trustee may be bound to either consider or follow your nomination if you pass away.
What is a trustee?
A superannuation trustee is generally a company which has been established to be responsible for administering a super fund and ensuring its legal compliance.
What is a beneficiary?
A ‘beneficiary’ is a person you nominate to receive some or all of your superannuation death benefit if you die.
What is a Non-Binding Nomination of Beneficiaries?
A non-binding nomination of beneficiaries is a written request made by you that suggests to the trustee the beneficiaries that you would like to receive your superannuation death benefit in the event of your death. The trustee must consider your nomination but is not bound to follow it. The trustee will have the final say on who your superannuation death benefit is paid to (generally one or more of your dependants or your Legal Personal Representative) and in what proportions it will be distributed.
To make their decision, the trustee will take several factors into consideration, such as personal relationships and the circumstances of those relationships when you passed away. If you have a will the trustee may also take this into consideration, and they may decide to pay your superannuation death benefit to the executor of your estate.
This process can take some time, meaning the allocation of your superannuation death benefit can be delayed while the trustee makes their final decision.
How to make a valid Non-Binding Nomination of Beneficiaries?
PO Box 777
Surry Hills, NSW 2010
Your nomination will be reflected in your Verve Super member portal.
What is a Non-Lapsing Binding Nomination of Beneficiaries?
A non-lapsing binding nomination is a legally binding instruction to the trustee on the beneficiaries that must receive your superannuation death benefit in the event of your death. So long as the nomination itself is valid, the trustee is bound to follow it.
A non-lapsing binding nomination means that the trustee must pay the superannuation benefit to the dependants you have nominated in the proportions you have provided in your nomination. This type of nomination overrides the trustee’s discretion over your superannuation death payment.
A non-lapsing nomination remains in place until you cancel it or change the beneficiary nomination by completing a new form.
Because of its non-lapsing nature, you are not required to update this nomination in writing every three years, as is the case with some other forms of binding beneficiary nominations.
A non-lapsing binding nomination will become invalid if one of your nominated beneficiaries dies before you do or is found not to be a dependant at the time of your death, or if the nomination was not made directly by you (if it is the trustee’s policy not to accept nominations through Powers of Attorney, or from anyone other than the member).
If a non-lapsing binding nomination is found to be invalid, it will generally be treated as a non-binding nomination.
How to make a valid Non-Lapsing Binding Nomination of Beneficiaries?
To make a valid non-lapsing binding nomination as a member of Verve Super, please complete the non-lapsing binding nomination of beneficiaries form.
Please ensure the form is signed by you, dated by you, and witnessed by two people when you sign. Once you have completed the form, please post the original copy to:
PO Box 777
Surry Hills, NSW 2010
This form cannot be received by email. The form must be sent as an original document because of its legally binding nature. There are strict guidelines to completing this form, please ensure you read it carefully and complete with care. If the form is incomplete, or does not meet the standards required, a nomination may be added to your account as a Non-Binding Beneficiary Nomination until you have provided a valid Non-Lapsing Binding Nomination form. If you’re not sure how to complete the form correctly ask your super fund or financial adviser.
At Verve, we offer for members to either scan or provide a photo of the form prior to sending it via post. We review the form, which helps to ensure the form is completed correctly and helps to avoid delays in the beneficiary nomination process.
Who can you nominate as a beneficiary?
You can nominate your legal personal representative, or one or more of your dependants, as your beneficiaries.
A dependant is:
- Your spouse (including a qualifying de-facto spouse of the same or opposite sex);
- Your child (of any age); or
- Any person with whom you have an interdependency relationship.
Two persons have an interdependency relationship if:
- They have a close personal relationship; and
- They live together; and
- One or each of them provides the other with financial support; and
- One or each of them provides the other with domestic support and personal care.
Two people will also have interdependency if they have a close personal relationship but do not satisfy the other requirements of an interdependency relationship because either or both of them suffer from a physical, intellectual or psychiatric disability.
For more information on dependants visit the ATO website.
If you do not have a dependant — such as a child or spouse — you may consider creating a will and then nominating your ‘legal personal representative’ as your beneficiary.
What if I have not nominated a beneficiary?
The trustee may pay your superannuation death benefit to your estate or use its discretion to decide to which of your dependants should receive the payment and in what proportion.
How do I change my beneficiary nomination?
Circumstances and relationships change – new children are born and spouses may separate. It is a good idea to regularly review the information you’ve provided to your super fund regarding beneficiary nominations.
To change your beneficiary nomination you generally need to complete a new form and submit it to your super fund.
Can I check if I have made a nomination?
If you are a Verve member you can visit the member portal and select “Insurance & Beneficiaries” in the menu. Here you will see any valid beneficiary nominations.
You can also check your Annual Member Statement from your super fund, as trustees are required to include information about any valid beneficiary nominations in place in this statement.
If you have any questions about the nomination of beneficiaries process please contact us via email@example.com or call 1300 799 482. You may also choose to see professional advice on how to ensure your super benefit is taken care of if you pass away
This blog is published by Verve Superannuation Pty Ltd (ABN 65 628 675 169, AFS Representative No. 001268903), which is a Corporate Authorised Representative of True Oak Investments Ltd (ABN 81 002 558 956, AFSL 238184), as the Sub-Promoter of Verve Super.
Verve Superannuation Pty Ltd and True Oak Investments Ltd are not licensed to provide personal financial advice. The information contained in this blog, including any financial guidance, is general in nature. You should consider seeking independent legal, financial, taxation or other advice to ensure that your financial decisions are suited to your unique circumstances.
You should read the Product Disclosure Statement, Additional Information Booklet, Insurance Guide, Target Market Determination and Financial Services Guide before making a decision to acquire, hold or continue to hold an interest in Verve Super. When considering financial returns, past performance is not indicative of future performance.