Superannuation: Your binding death benefit nomination

Ensure that after your death your superannuation is paid to who you want

What is a Binding Death Benefit Nomination?

A binding death benefit nomination is a direction you sign to the trustee that sets out the beneficiaries who you want to receive your superannuation benefits upon your death.

First, a story to tell. Paul and Greta were in their late 30s with 3 young children and had a lovely home on Sydney’s North Shore. Paul’s high income as an account executive for a large company adequately covered the substantial mortgage payments. Greta was a full time mother.

Tragedy struck when suddenly, Paul died of a brain haemorrhage. His superannuation amounted to around $500,000. Greta thought that as the sole beneficiary of Paul’s Will she would also receive all his super.

Imagine the shock when Greta was informed by the trustee of Paul’s super fund that as Paul had not signed a nomination, the superannuation benefit would not be paid to Greta but would be held in trust for the children. So far as the super was concerned, Paul’s Will, though valid, was irrelevant.

Faced with a huge mortgage to pay, Greta felt compelled to take legal proceedings against the trustee.

The Importance of a Binding Death Benefit Nomination

Unless your super fund is holding a valid nomination, when you die, the fund has discretion as to whom your super benefit is to be paid. As in the story above, the trustee’s decision may not always result in a distribution to who you expected.

By nominating who should receive your benefit, you will avoid the predicament that confronted Greta. A binding death benefit nomination removes the uncertainty about who receives your super and helps you manage your estate planning process more precisely and effectively.

By having a binding death benefit nomination in place, costly and time-consuming proceedings by dependants making competing claims on your super benefit, can be avoided.

Who can I nominate?

For a binding nomination to be valid the nominated beneficiary must be:

  • Your current spouse / partner
  • Your children of any age (including adopted / step children)
  • Anyone financially dependent on you
  • Any interdependent
  • Your executor / administrator – so that the entitlement is paid to your estate

How long does it last?

Typically a binding nomination is valid for three years *. Your super fund should advise you when your nomination is about to expire. You may cancel your nomination at any time.

How do I make a binding nomination?

Signature is similar to executing a Will. You need two witnesses who are not beneficiaries, aged 18 or over. The form must specify the nominated beneficiaries and their respective proportions for payment. Download the form from your fund’s website.

You need to ensure that you have considered the needs of all your dependents when it comes to distributing your assets.

Superannuation and my Will

Greta was unaware that Paul’s estate and his super would be treated differently. Unfortunately as Paul had not signed a nomination the trustee’s discretion was paramount.

In preparation for your conference with one of the Best Practice Lawyers regarding your estate planning arrangements do ensure that you have a current binding death benefit nomination.

Contact a Best Practice Lawyer today to seek assistance with your estate planning arrangements

* A super fund may have its own rules regarding the duration of the Nomination

Collaborative law – resolving disputes respectfully

Collaborative Practice explained

Collaborative Practice is a fresh approach to resolving disputes without going to court. It helps separating and divorcing couples resolve your differences respectfully and in private.

The essence of Collaborative Practice is that both you and your spouse/partner focus on the future and the needs of the family unit. This helps ensure that the process is focussed on the future needs of your family and you have the peace of mind that your dispute will not go to court.

Collaborative Practice allows you to create a future that meets your unique needs and involves you consulting with inter disciplinary collaborative practitioners such as Family Dispute Resolution Practitioners and Mediators, Financial Specialists, and Parenting Specialists who all work together to help you negotiate a workable outcome that best suits your needs.

Dispute Resolution Practitioners and Mediators, Financial Specialists, and Parenting Specialists who all work together to help you negotiate a workable outcome that best suits your needs.

By its nature, it avoids the need for lengthy and expensive affidavits and other court documents to be prepared. Time frames are determined by the parties not by court lists and timetables.

Each party agrees to make and honest and open disclosure of all documents and information. This method of resolving a dispute invites parties to act respectfully towards each other.

The process

All negotiations are conducted in four-way meetings attended by the solicitors and the parties themselves. The Collaborative process follows the following steps:

  • identify what is important to each client (interests);
  • identify what questions the clients need to answer;
  • gather information;
  • create the maximum number of choices;
  • evaluate options and modify and refine them;
  • negotiate to an acceptable agreement; and
  • closure.

Collaborative Practice offers the prospect of a solution for your long term benefit that is cost-effective, flexible, confidential and non-adversarial.

Mediation

There are two ways that parties can resolve their disputes:

  1. by agreement
  2. by Court ruling

Mediation is all about helping the parties reach their own agreement. Mediation involves an independent third party called the Mediator. It is the Mediator’s role to assist the parties in reaching a voluntary agreement. The Mediator does not decide how the dispute should be resolved.

Mediation has a number of advantages over litigation:

  • mediation is less expensive and less time consuming
  • mediation is confidential whereas litigation is public
  • mediation leaves control of the outcome in the hands of the disputing parties rather than in the hands of a Judge
  • mediation may allow solutions that a Court cannot offer
  • mediation can extend beyond restrictive legal issues and may allow parties to repair or preserve ongoing relationships.

Best Practice Lawyers can offer qualified mediators as well as trained and experienced lawyers to represent parties at mediation.

Pre-sentence reports

Where the Magistrate is considering the appropriateness of imprisonment on sentence, commonly a Pre-Sentence Report is ordered. It is prepared by the NSW Probation and Parole Service.

This report will assist the magistrate in determining sentence and will cover such issues as family history, education, employment and attitude towards the offence. The report is made available to us at court on the sentence date. The reports fall into two general categories:

  • those prepared during a pre-sentence adjournment, which are written and provide considerable detail; and
  • those produced at court at short notice, which are either oral or in writing and concentrate on the availability of particular sentencing options and your suitability for them.

If your matter is adjourned for the preparation of a detailed report, this is an ideal opportunity for you to demonstrate that you are motivated and well organised in providing to the officer:

  • Your full employment history including past employers contact details and the dates that you were employed with each;
  • Your current pay slip;
  • Details of your family including age and occupation and contact details of each family member;
  • Any educational certificates and up-to-date references;
  • Community involvement links such as membership of associations/service clubs (eg Rotary), charities, church/school fundraising activities, or any other public-minded endeavour;
  • What efforts and lifestyle changes (constructive use of your spare time through hobbies, sport, recreation and fitness) you have made to avoid the risk of re-offending;
  • Any other information that you consider helpful in the officer’s preparation of the report, you are welcome to provide.

Although the recommendations made by the officer are not binding on the court, they can be persuasive on the court’s determination of the appropriate sentence. You must make an appointment with the Probation Officer within 7 days of the court ordering the Pre-Sentence Report and it is vital that the appointment be kept.