Superannuation - nominating beneficiaries

[Pandora]

Does anyone have their kids nominated as their superannuation beneficiaries or know what the implications would be if they were to receive it as a minor?
I need to do my nominations and I don't k ow what to do my parents recko. I should split it between the boys and skip dh entirely where I was going to do 50-25-25

[Bumperstump Cummerbund]

Because its something you can change later, I would give it all to your DH, and update your will at the same time, to say if something happens to both of you, the children get the money, but only from a certain age ITMS. You can get a trust set up in that case, to pay for their care etc, until they come of age, when they get the rest as a lump sum.

Not sure if thats any help to you

[Cupcake]

I will be changing mine to the little bean once born & my mum, i imagine it would go into a trust account or something until they reach a certain age? Thats a blind guess tho...

[Indadhanu]

I did Shel 100%, mostly because my understanding is that if it went to Jazz she couldn't touch it until she's 'of age'? But if something happened to me and the money went to Shel at least she could use it to look after Jazz. And obviously if something happened to both i our wills we have it going to a trust and guardians to use it to look after Jazz.

[misty]

Why would you skip your DH???

If the kids are minors, then their surviving parent or guardian would hold it in trust for them - it could be spent on anything, so long as it is spent for them (ie, rent, food, electricity, new car, education, whatever..)

DH just updated his nominations yesterday. 5% for each kid, and the remaining 85% for me. The only reason that we even had the kids nominated at all is in case DH and I die together - the contribution would then be split evenly amongst the surviving beneficiarys, quicker then if they weren't listed; in which case the super company can determine who it is given to. If I am still around, I will be the one determining how my kid's 5% gets spent anyway (probably education). It's not really their's per se, but rather would be the money DH would have spent towards their upbringing anyway.

It is really up to who you would want / think should have the money. But bear in mind that even though you nominate, it can be contested by spouse or offspring if it isn't fair.

[Visitor7]

While the girls are still minors, I have left mine to dh 100%. When the girls reach 18, I will change it. I don't know at this stage what percentage I would change it to. I trust that I was to pass beforehand, dh would do what's best for our children.

[misty]

Oh and it is important to remember that to be a beneficary of a super fund or superfund insurance, they must be a dependant or spouse. So generally speaking if you choose to nominate a brother who isn't dependant on you and you have dependants or a spouse, the superfund can rule that nomination void and the just give it to whomever they think is the dependant or spouse. The nomiations are not really binding (although for the most part they are followed) and can easily be set aside. Many people nominate incorrectly and the superfund determines for itself where the money should go anyway. The reason for nominating at all is simply to speed up the process for the benefiaries (it can take a blody long time to get anything out of them even with nominations).

get in touch with your super fund and ask them to send you some info on this, so you can decide properly and ensure you know how it works.

[Pandora]

Thanks, there are binding and non binding nominations.
I want to make a binding nomination which has to be witnessed etc, I thought that if i did that, then they had to disperse the $ in the way i told them to?

I thought that by specifically giving it to the it would have to be spent on them, which is what i want to happen.

I might just go with the suggestion of specifying in my will how it is to be used.

[Miss E]

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.

[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.