When the member of a superannuation fund dies, their entitlement to the assets of the fund is known as a death benefit.
Death benefits must be transferred out of the super fund and it is important for members to understand and be comfortable with where their death benefit will be paid.
Most funds let you nominate who you want your death benefit to be paid to but this can only be done strictly in accordance with the terms of the trust deed of the fund.
Many funds have a set form for the making of nominations but it is important for you to ensure that your nomination is binding on the trustee of the fund and to understand that in many cases, nominations will lapse after 3 years and will need to be renewed.
Whether you elect to make a nomination or not, your death benefit can only be paid to the executors of your estate or one or more of your dependants.
A dependant in this context is either a child or spouse of the deceased or someone who was financially dependent on the deceased or in an interdependent relationship with the deceased.
There are often good reasons why you should plan to make a binding death benefit nomination in favour of one or more of such persons as part of a comprehensive estate plan.
If you have any queries about this or any other aspect of estate planning then please contact us on 07 5443 9988 or [email protected]