What happens if I don’t nominate a beneficiary?
When you pass away, ultimately it will be up to the trustee of your super fund to determine which of your dependants will receive the remainder of your superannuation.
Because of this, it’s important to nominate beneficiaries.
Where going to look at the importance of the beneficiary process and what happens if you fail to nominate one. By understanding the way this process works, you can be sure that you will make the right financial decision for your family in the future.
How do I nominate a beneficiary?
A beneficiary is the person you have nominated to receive your super death benefit. Nominations can be binding or non-binding. Having a non-binding nomination in place will remove uncertainty, so you know exactly who will receive your money.
Any of your dependants can be nominated as a beneficiary, including the people who are financial dependent on you at the time of your passing.
What happens if I don’t nominate one?
While this varies from fund to fund, generally if you don’t make a nomination your trustee will be into contact with your executor and ask the members of your family if they would like to make a claim, and who else may be eligible to receive it.
Death benefits are generally paid in priority to surviving spouses or young children, over adult non-dependent children. If you don’t have a spouse, children or any dependents, your super death benefit will be paid straight to your estate.
What else should I consider?
While it’s a pretty grim topic to think about, it’s important to consult an adviser or lawyer to determine the tax and legal implications of your decision. In the end of the day you’re going to want to make a decision that achieves the optimal financial results for your dependants, so they don’t get overwhelmed by red tape at this unfortunate time.
Have you nominated a beneficiary for your superannuation? Were you aware of the restrictions and limitations in place on this practice?
Share your thoughts in the comments.
Related links:
5 most commonly asked questions about super
When is it ok to access your super early?
There’s a problem with my super – where can I get help?