Superannuation - nominating beneficiaries

[Pandora]

If you do a binding nomination the super fund has to follow it. In most cases you also have life insurance with your super which means the final payout is usually much more than just the balance of your account. In my case DH and I have left 100% to each other and set our insurance at a level which would allow either of us to pay of the mortgage etc so that the surviving one could continue to provide DS with the life that he is accustomed to and not need to worry about making ends meet.

Thanks, yes thats what i was thinking.
I just wasnt sure who to leave it to.

[amberj]

I am a lawyer who deals in this stuff all the time, so here is the "official" lowdown

* There are two types of nominations as others have said- binding and non-binding. Where you do a non-binding nomination, the super fund still has a discretion about who to pay the money to when you die. They must pay it to a "dependant" (spouse, partner, child), and if you don't have any of those, then to your estate. Even if you do a binding nomination, it still MUST be to a dependant. The superannuation rules do not allow the super funds to pay your money to anyone but a dependant or your estate- eg- if you had put your parents down on a binding nomination, that nomination would be invalid.

* As far as payments to minors, it depends on the super fund. I am handling an estate at the moment with payments to minors from 3 different super funds. One, to my utter shock, made out cheques to the minors- one of the kids is 7!!! And he has a cheque for like $100,000! Another of the funds made the kids guardians establish trusts for them to pay the money in to. Yet another has agreed to pay to the estate to take advantage of the trust set up in the Will. This is by far the best way, because in your Will you can set out who manages the money and how its used- plenty of protection.

So... I usually recommend to my clients that they nominate either:

- their estate- which means it goes to their Will, and in their Will we set out what is to happen with it; OR
- each other (spouses) and then to their estate, and in their Will we set up a good trust for the kids.

Its obviously important to have a proper Will in place if you are nominating your estate.

Bear in mind that how super is taxed depends on who it is paid to, and you can get clauses included in your Will to ensure the most tax effective distribution as possible.

Please feel free to ask me any questions!!

[melbel]

I would think it would be easier to stipulate your wishes if made the benficiary your estate and then divide it up with specific instructions etc in your will....that is what we intend to do once junior is here. Then in your will you can provide for trust accounts and executors etc in the event both you and your husband were to die together.

[Astrolady]

I need to update both mine and Andrews. Both of ours go to our parents. Mum I would trust to hand back over to my family. The out-laws I don't.