Beneficiary’s and your superannuation

Most superannuation funds give you choice of who you can nominate as a beneficiary to receive your super benefits in the event you pass away. I say most as here in South Australia for example, the state government super scheme (SuperSA Triple S) has a different set of rules where it automatically gets paid to a surviving spouse or you can choose to nominate your Legal Personal Representative (i.e. your Estate).

Whether who you nominate is a valid nomination or isn’t a valid nomination is often discussed. Generally only a dependant can be nominated, and if you don’t want it to go to a dependant, then you can nominate your Estate (for it to be administered as per your instructions in the Will for example).

Who is a dependant? Dependant’s can be:

• Your spouse or de facto spouse
• Your children (including step and adopted children of your spouse)
• a person who lives with you in a close personal relationship and depends on you financially. They may provide you with:
  • domestic support and
  • personal care

I have come across people nominating for example their sibling as a death benefit nomination on their superannuation fund. Now in reality although it might say it on your statement that your sibling is the beneficiary as this is who you selected, when you do pass, unless your sibling is a dependant as noted above – then they won’t meet the definition as a beneficiary for superannuation purposes and therefore the nomination becomes invalid and it is then up to the super fund trustee to review who gets the payment.

Superannuation funds have a lot of different nominations available, some are binding and need to be renewed ever three years, some never need renewing and some are non-binding. To get certainty about what will happen in the event you are not here – it is best to engage a financial planner and/or a solicitor who understands this area.