You Could Be Making a Huge Mistake with Your Super

This might not be the most exciting topic, but it’s crucial nonetheless: making sure you’ve got a binding death nomination in place for your superannuation.

Now, I know what you’re thinking – super is something we often put on the back burner. After all, it's something for the future, right? But when it comes to your super, especially in the event of your passing, it’s essential to be proactive. That’s why I’m here to explain why having a binding death nomination is something you simply can’t ignore.

What’s a Binding Death Nomination?

Let’s start with the basics. A binding death nomination is a formal instruction you give to your super fund about who you want your superannuation balance to go to if you die. This could be your partner, kids, or even a charity, depending on who you choose. The key word here is binding. A binding death nomination means your super fund must follow your instructions – no questions asked.

Without a binding death nomination, it’s a different story. If you don’t nominate a beneficiary or if your nomination isn’t binding, the super fund has the discretion to decide who gets your super. This could mean it ends up in the wrong hands, potentially causing stress and delays for your loved ones during an already tough time.

Why is This Important?

When you die, your super isn’t automatically passed on to your next of kin in the same way that assets like property or money might be. That’s because your superannuation is considered a separate entity. And unless you've made a binding death nomination, your super can be sent off in a direction you might not have intended.

But that’s not the worst part. The worst part is the potential for conflict. Imagine your family is grieving, and they don’t know who is supposed to receive your super. Without a clear, binding nomination, it could end up in the courts, with people fighting over it. Not only does that delay the process, but it also adds unnecessary stress at a time when the last thing you want to do is add to your family’s burden.

With a binding nomination, you’re making the decision upfront. Your super fund has no wiggle room. Your wishes are clear. Your loved ones will know exactly what to expect, and they can access your super quickly to take care of whatever financial matters need attention.

The Simple Steps to Get It Done

The good news is, setting up a binding death nomination is simple and doesn’t cost a lot of money. Here’s how you can get it done:

1. Check with your super fund: Start by contacting your super fund. They’ll give you the forms or online instructions for setting up a binding death nomination. If you have a Self Managed Superfund, speak to one of the team at Tolevsky Partners and we’ll help you do it correctly.
2. Nominate your beneficiaries: Decide who you want to leave your super to. You can nominate a spouse, children, or other dependants, and even legal entities like charities.
3. Keep it up to date: Life changes. People come and go. If you get married, have kids, or if your circumstances shift, make sure your nomination is updated.
4. Complete the paperwork: Once you’ve decided on your beneficiaries, fill out the forms and submit them to your super fund. It’s a one-time process that gives you peace of mind, knowing your super is being looked after.

What Happens If You Don’t Have a Binding Death Nomination?

If you don’t set up a binding nomination, things can get messy. In some cases, your super can go to someone you wouldn’t have chosen – perhaps an estranged relative or an ex-partner. If there’s ambiguity in who should get your super, your super fund might be forced to make a decision based on their discretion, which can cause delays and confusion.

Even if you do nominate someone, if it’s not binding, the super fund can ignore your nomination, potentially leaving your family in limbo. Not something you want to think about, but it’s important to be aware of.

Bottom Line

Getting your affairs in order isn’t about being morbid. It’s about taking control of your future and protecting the ones you love. Setting up a binding death nomination for your super is one of the easiest things you can do to ensure your super ends up where you want it to go. It’s a small task that can make a huge difference for your family when the time comes.

Remember, your super is yours, and it’s up to you to decide where it goes. Don’t leave it to chance or to others to figure out. Take five minutes today to make a binding death nomination – it’s a step towards financial security and peace of mind for your loved ones.

Chris Tolevsky has over 30 years experience in the medical and allied health fields.  He provides expert guidance on tax strategies, building and protecting wealth . If you’re interested in discussing how we can help you please book a complimentary consultation. 

Disclaimer: This article contains general information only . It is not designed to be a substitute for professional advice and does not take into account your individual circumstances, so please check with us before implementing this strategy to make sure it is suitable