Where does your superannuation balance go when you pass away? Well if you haven’t made a Binding Nomination it might not go where you think it would.
Inside your Superannuation you have two different sorts of nominations you can have on your account:
Non-Binding or Binding.
Non-Binding is basically informing the Superannuation fund of your wishes, however it is up to the Superannuation fund to decide. This could lead to the funds going to an unintended recipient (such as a room mate).
Binding nominations add that extra layer of security, and provided the nomination is valid the Superfund must pass the money on in accordance with your wishes.
So what makes a nomination valid? Well, it has to someone that is a SIS dependent, this is your spouse (including defacto), children (including adult children), anyone that is dependent on you, or an interdependent relationship. If you don’t have anyone you want to nominate that ticks those boxes (such as siblings or parents) then you can nominate your “personal legal representative” which is a fancy way of saying “add it to my estate” and it will be distributed as per your Will (which you should look at getting done).
Next a binding nomination needs to signed by two witnesses, they need to over 18, but also, cannot directly benefit from the nomination on the account. (they cannot be nominated beneficiaries, however could receive a distribution from the Will)
Depending on your age you might think “What’s the point, there isn’t much in there”, well, even a small balance should be considered, but also, you might have default Life insurance in the hundreds of thousands of dollars, and I’m sure you would want that to go to the right person.
If you have any questions in regards to your nomination, please feel free to book in your complimentary meeting and we can discuss your estate needs.