A Binding Death Nomination is a direction you give the trustee of your superannuation fund to direct them where to pay your superannuation benefits when you die.
Your choices of where to pay your super are limited to either:
- One or more individuals who are “superannuation dependents”; or
- The Executor of your Estate.
A “superannuation dependent” includes your spouse (including de facto spouse), your children (including adult children), and a person who is “financially dependent” on you when you die.
The superannuation law provides that a nomination can either be:
A non-binding nomination is like a “statement of wishes” you give the Trustee of your super fund. It is not binding on them – and they may decide to pay your super to someone else, or in different proportions.
A binding nomination – if properly done – will legally bind the Trustee to pay your super as you nominate.
Under superannuation law a binding nomination must be witnessed by two adults, and will automatically lapses after 3 years, i.e. it becomes non-binding at the end of 3 years, unless you provide an updated binding nomination within that time period. This applies to all regulated super funds.
However, if you have a Self Managed Super Fund – then it MAY be possible to make a binding nomination that lasts for an indefinite period of time, i.e. a “non-lapsing binding nomination”. The non-lapsing nature of the nomination is created by the terms of the Super Deed that regulates the Fund – rather than the superannuation law. For this reason, a non-lapsing binding nomination can only be made if the Super Deed of your Fund specifically provides for non-lapsing binding nominations.
