What it is
Superannuation benefits, including proceeds from life insurance policies held through superannuation, do not form part of an Estate upon death and are not distributed to your beneficiaries through your Will. The payment of death benefits from a superannuation fund is managed by the trustee of the Fund and, unless a valid death benefit nomination/s are implemented, where your superannuation benefits are paid is left at the discretion of the Trustee.
A Death Benefit Nomination, is a nomination made on Superannuation accounts, that enable a person to indicate their preference for the distribution of their death benefit, between their dependants and/or their Estate. The nomination however, does not bind the Trustee to pay the death benefit to the preferred beneficiary or beneficiaries, unless the nomination is made “Binding”.
A Death Benefit Nomination can also be “Lapsing” or Non-Lapsing”. If “Non-Lapsing”, the nomination will not expire and remain in place, for as long as the nomination retains its validity. A “Lapsing” nomination is normally valid for three years.
It is not a straight forward process. If not implemented correctly, the Estate can be up for potential disputes or see the Estate distributed in an unfavourable manner.
The potential risks and implications vary from client to client and therefore each individual situation needs to be assessed accordingly. Should you wish to obtain more information on this, please contact us.
We are not licensed to provide legal advice. The information on this topic is general in nature and does not constitute advice. It is intended as points to be discussed with your legal specialist.