Nominating beneficiaries

Did you know super isn’t automatically part of your estate? That’s why nominating beneficiaries is an essential aspect of estate planning.

Mother reading a book to her child on the floor

Beneficiary options

Your choice will determine who gets your assets when you pass away. beneficiaries can be a partner, children, or someone close. By taking a few simple steps today, you’ll give peace of mind to loved ones in a time of stress and hardship sometime in the future. Outlined further below are three kinds of beneficiaries available.

You can nominate the following individuals to receive your superannuation benefit: 

  • Spouse (legal and/or de facto); 
  • Children (including step, adopted, ex-nuptial); 
  • A financial dependant at the date of death and 
  • A person in an interdependent relationship with you at your death. 

A Dependant is defined as:  

(a) the spouse of the person, any child of the person and any person with whom the person has an interdependency relationship at the relevant time (being in the case of a deceased person the date of their death); and  

(b) any other person who, in the opinion of the Trustee, is at the relevant time (being in the case of a deceased person the date of their death) wholly or partially dependent on the person. 

Interdependency 

Two persons have an interdependent relationship if:  

(a) they have a close personal relationship;  

(b) they live together;  

(c) one or each of them provides the other with financial support and  

(d) one or each provides the other with domestic support and personal care.  

Two people have an interdependency if they have a close personal relationship but do not satisfy the other requirements of an interdependency relationship because either or both of them suffer from physical, intellectual or psychiatric disability. 

If you wish your benefit to pass in accordance with your Will, or if you do not want to nominate a dependant, or you have no dependant to nominate, you may instruct the Trustee to pay your benefits to your legal personal representative. Your nomination should be carefully considered and updated regularly or whenever your personal circumstances change. 

If you don't nominate someone specifically, the Trustee may decide to: 

  • Pay your estate so that benefits are divided according to your Will. If you die without a Will, your benefits will be divided according to a state-based formula or  
  • Look for eligible beneficiaries and pay them directly. 

So, without beneficiaries, your super may not end up where you intended. Even if it ends up in the right hands, it can take longer to get there. 

All lump sum death benefit payments made to a ‘tax dependant’ will be tax-free.

A ‘tax-dependant’ includes your spouse, a child of yours under 18 years of age, a person who is a financial dependant and a person with whom you have an interdependent relationship. Death benefit payments to a non-tax dependant will be taxed at 0% on the tax free component of the benefit, a maximum of 15%* on the taxable (taxed) component and a maximum of 30%* on the taxable (untaxed) component.

A non-tax dependant for this purpose includes an adult child aged 18 or more that is not a financial dependant. Where a death benefit is paid to your legal personal representative, tax will be payable according to who will benefit from your estate. The taxable (untaxed) component generally consists of proceeds from insurance you held within legalsuper

* Medicare levy and Medicare levy surcharge (if applicable) are added to these rates.

 

Superannuation is not an estate asset and will not automatically get distributed according to your Will. Super has its own distinct legal structure where the Trustee acts in accordance with the Trust Deed. 

Due to this structure, your super needs to be considered separate from your Will when putting together an estate plan.

Non-binding nomination

A non-binding beneficiary nomination guides the legalsuper Trustee in deciding who will receive your superannuation benefits (including any insured benefits applicable) in the event of your death, referred to as your death benefit. This type of nomination is not legally binding; however, it will be considered along with the rules in legalsuper's Trust Deed and superannuation legislation.

A woman sitting in a business meeting listening

How do I make a non-binding beneficiary nomination?

  • Log in to MemberAccess and complete the nominations under the beneficiaries section. 
  • Alternatively, download and complete the appropriate beneficiary nomination form for your account type. Remember to make sure that your allocation totals 100%. 
  • You can check who your nominated beneficiary/ies are on your Annual Statement or via MemberAccess. 

 

Binding beneficiary nomination

A binding beneficiary nomination is a formal written direction from you to legalsuper to tell us who you want your account balance paid to, in the event of your death. It is a legally binding document. A valid Binding nomination of dependant(s) or legal personal representative (estate) will bind the Trustee to pay your entitlements on your death precisely as you specify. Your nomination will only be valid and binding if it is made in accordance with the relevant requirements. A binding nomination comes into effect from the date we accept it and expires three years from the date you sign the form. You can change or cancel your nomination at any time.

Businessman working on a laptop while sitting at his desk

How do I make a binding nomination?

  • You can set up or change your binding nomination by downloading and completing a valid ‘Nomination of beneficiary/ies form for your account type. 
  • Your nomination should be carefully considered and updated regularly or whenever your personal circumstances change. 

Reversionary beneficiaries

A reversionary beneficiary can only apply to legalsuper's Pension and Transition to Retirement Pension accounts. It cannot apply to a Personal super or Employer-sponsored super accumulation account. 

A reversionary beneficiary is the person who will receive the balance of your death benefit as an income stream. Only spouses, certain children and dependants are eligible to become reversionary beneficiaries. 

Businesswoman pointing at laptop screen explaining work to business partner

How do I nominate a Reversionary beneficiary?

You can only nominate one person as a reversionary beneficiary. A valid reversionary beneficiary nomination is binding on legalsuper and can only be established when creating a new pension account. 

For more information, please refer to the Product Disclosure Statement.

lifebuoy-2.png

Need more help? Contact our Client Services team

As a member, you can get personalised support from our Client Services team at no cost or obligation. They can provide general information and limited personal advice on managing your retirement account.
Book a meeting