Money

Certainty for your super

Paul Clitheroe is a founding director of financial planning firm ipac, chairman of the Australian Government Financial Literacy Board and chief commentator for Money magazine. Visit www.paulsmoney.com.au for more information.
Paul Clitheroe is a founding director of financial planning firm ipac, chairman of the Australian Government Financial Literacy Board and chief commentator for Money magazine. Visit www.paulsmoney.com.au for more information.

AS our system of employer paid superannuation continues on, many working Australians will amass a significant super nest egg over their working life. It's important to have certainty over who inherits your super savings if you die prematurely because super cannot be bequeathed to loved ones in the same way as your home or other assets.

Australia has a vast pool of superannuation savings, currently estimated to be worth around $1.3 trillion. We often assume that our super will form part of our estate when we die and that the cash will be distributed in line with our will. But super doesn't work this way.

Unlike other assets that make up our personal estate, your super cannot always be passed on through your will.

Strictly speaking, the trustee of your fund can decide who receives your super if you die, and the trustee's decision may not reflect your wishes.

To be quite sure about who inherits your super, it's worth asking your fund about making a 'binding death benefit nomination'. It's an option many funds offer at no charge.

Binding nomination give you the certainty of naming those dependents you would like to receive your accumulated superannuation.

The key word here is 'dependents', and this normally means your spouse or partner (including a same sex partner), your children or someone else who is financially dependent on you at the time of your death. You can also nominate a legal representative, which for most people is the executor of their estate.
 
You can choose to split the money between your dependents as you see fit. But it's important to specify exactly how you want the money divided up.

If you don't have a binding nomination, your fund trustee can divide your super savings in the way that it believes is fair.

Unfortunately, making a binding death benefit nomination isn't a set and forget matter. These nominations are only valid for three years so it will need to be updated reasonably regularly.

That's not always a bad thing as our circumstances can alter and you could have a change of heart about who you'd like to inherit your super.

You can adjust your binding nomination at any time but remember, if the nomination expires your trustee may pay out your nest egg as if you had never entered a binding nomination at all. That said, your fund should send you a renewal notice when the nomination is about to expire.

As with many aspects of superannuation, there can be varying tax implications for super payouts received as an inheritance. That makes it worth speaking with your financial adviser or lawyer before making a final decision regarding a binding death nomination.

Organising a binding nomination is a matter of filling in a form provided by your fund, and in many cases you can download the necessary paperwork from your fund's website.  It's worth the effort for the certainty it gives you and your family, and along with having a valid will, it's something that plays an important role in your estate plans.

Paul Clitheroe is a founding director of financial planning firm ipac, chairman of the Australian Government Financial Literacy Board and chief commentator for Money magazine. Visit www.paulsmoney.com.au for more information.

Topics:  clitheroe superannuation



Police to soon analyse drug, alcohol test by roadside

NSW police breath testing drink driver.

No more driving to the station to await results

Keep a hold of memories with new Bellingen app Keepsake

KEEPSAKE: Jacquie Houlden created the app, Keepsake, which allows users to digitally store memories of special items.

'Living will' app passes on memories

Australian Expos will be playing in Coffs

Blue Sox player Nick Dollin will tour with the Expos.

Local pair picked to tour USA with the Australian Expos squad.

Local Partners

Coffs to farewell a true gentlemen

Coffs Harbour to celebrate the life of revered funeral director


What to expect at Birds of Tokyo's Ipswich gig

The band will perform at the Racehorse Hotel on Friday.

BAND member Glen Sarangapany talks music, pub grub and doing shoeys

Petula Clark delighted to sing live for Australian fans

STILL TOURING: English singer Petula Clark is coming to Queensland.

English star Petula Clark still puts on a great show, even at 84.

Do you really know your road rules?

Cars travel around the roundabout at Villiers and Fitzroy Street. Photo Adam Hourigan / The Daily Examiner

List of the top 10 most misunderstood road rules in NSW.

Lyn's knock-out show gets her to next round on The Voice

A POWERFUL and emotional rendition of The Beatles' anthem Let It Be saw The Voice contestant Lyn Bowtell soar through to the next round.

Dreamworld may supersize with 'Disneyland expansion'

Dreamworld could become a “more attractive and entertaining park”.

World’s strongest man reveals incredible 12,000 calorie diet

Brian Shaw won his 4th World's Strongest Man title. Source: Twitter

World’s strongest man reveals incredible 12,000-calorie diet

ABC2 slammed over football exhibition match coverage

Fans weren't too happy with ABC2's coverage of Wednesday night's game.

ABC2 slammed for coverage of soccer exhibition match

'Bulls--t!' Lisa Wilkinson grilled over Karl's pay packet

Join us for a Great Night as we Proudly present Lisa Wilkinson

“And you believe everything you read?”

Rebel Wilson trial: The secret we never could have known

Rebel Wilson outside court

“Most people wouldn’t know it exists,” she said.

Janet’s back in the ring

Marta Dusseldorp returns in season three of the TV series Janet King.

Season three of ABC's legal drama delves deeper than ever before.

Jetty views don't come any better than this

Property Camperdown St

The Real Estate Property Guide is online now

Kids will love living in this new Coffs Harbour estate

FAMILY FRIENDLY: This children's playground is the latest family-friendly feature of the Elements@Coffs estate.

Local land estate unveils newest family friendly feature

How Toowoomba house prices compare in Australia

For sale sign in front of home.

Here's what $700,000 will buy you in Toowoomba, Brisbane and Sydney

UPDATE: Details revealed on rural land rezoning

REZONING: Large areas of Bonville have been rezoned for residential

Land rezoning will turn farmland into residential living

Bonville to become new housing hub

REZONING: Large areas of Bonville have been rezoned for residential

Land rezoning will turn farmland into housing

Ready to SELL your property?

Post Your Ad Here!