Article Category - Wills & Estates By Peter McManus 27 April 2021

It is usually an unknown fact that a person's Superannuation is not an Estate asset and therefore, cannot be left to anyone in a person's Will. This is because technically, the funds a person has in their Superannuation is not owned by them, it is owned by the Trustee of the Superannuation fund and are subject to the Superannuation fund’s trust deed.

The Trustee of the Superannuation fund will determine how and to who the deceased Superannuation is paid in accordance with the Superannuation fund’s trust deed, which is usually to either one or more dependants of the deceased or the deceased’s Estate.

However, the Superannuation Industry (Supervision) Act 1993 provides an exception to how and to who the Trustee determines to pay the deceased’s Superannuation. The exception allows a person prior to their death to nominate to whom and in what percentage their Superannuation is paid. There are three main types of nominations:

  1. Binding death nominations;
  2. Non-lapsing death nominations; and
  3. Non-binding death nominations. 

Binding death nominations

A Binding Death Nomination (“BDN”) is not offered by all Superannuation funds and is a notice in writing (usually the Superannuation fund has a particular form) to the Trustee of the Superannuation fund which specifies to who and in what percentage your Superannuation is to be paid to if you die.

The BDN expires after three (3) years and needs to be renewed every three (3) years, the BDN may be amended or revoked at any time.

Non-lapsing death nominations

A non-lapsing death nomination is simply a BDN but unlike a BDN which needs to be renewed about every three (3) years, a non-lapsing death nomination is permanent. The member can change the non-lapsing binding nomination at any time. However, not all Superannuation funds do not offer non-lapsing binding nominations.

Non-binding death nominations

A non-binding death nomination is a member telling their Superannuation fund who they would like their Superannuation paid to, but not do anything else to make sure that the person they nominate gets the member Superannuation. It is like a wish, but the Trustee of the Superannuation fund is not required to follow a member's non-binding death nomination.

If you have any questions, our experienced team is here to help with all your Will and Estate Planning needs in Bathurst, Oberon, and Lithgow on (02) 6331 2911.

Peter McManus | Senior Associate