The options

  • Binding nomination: the trustee must pay the people you name, if the nomination is valid. In many public funds these lapse after three years unless renewed.
  • Non-lapsing binding nomination: offered by some funds, stays in place until you change it.
  • Non-binding nomination: a guide only; the trustee decides.
  • Reversionary pension: a pension continues to a nominated dependant.

Who you can nominate

Your dependants under super law (spouse, children, financial dependants and people in an interdependency relationship) or your legal personal representative (your estate).

The SMSF trap

For SMSFs, the ATO's view is that the three-year lapsing rule does not apply unless the trust deed imports it, but the nomination must follow the deed exactly. In Hill v Zuda (2022) the High Court considered SMSF nominations. Courts have struck down nominations that did not follow the deed. Have the deed and nomination reviewed together.

Tax matters too

Payments to adult children who are not dependants can be taxed: see super death benefit tax rates, death benefits for adult children and the calculator.

Quick answers

Does my will cover my super?

Not automatically. Super is paid by the trustee under the fund rules unless there is a valid binding nomination to your estate or dependants.

Do binding nominations expire?

In many public funds after three years unless renewed or non-lapsing. In SMSFs it depends on the trust deed.

Sources

General advice warning. This article is general information only and does not take into account your objectives, financial situation or needs. Rules, rates and thresholds change; check the sources above. Consider the relevant PDS and our Financial Services Guide and seek personal advice before acting. FinForce is a Corporate Authorised Representative (No. 001241242) of Financial Force Pty Ltd, ABN 42 091 425 464, AFSL 238337.

Related