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Superannuation Death Nomination

Who decides what happens to your superannuation when you die?
On death, the trustee of a Super Fund is required to pay a death benefit on your behalf.  Super benefits can either be paid to beneficiaries or to your Estate.

There are two different types of beneficiaries whom can receive superannuation death benefits: dependants and non-dependants.

The trustee of your super fund decides who gets your superannuation unless you have made a Binding Death or Reversionary Death Benefit Nomination to an eligible dependant.  Binding nominations provide greater certainty as to who receives your super benefits.

Unfortunately most people forget to keep their binding nominations up to date or forget to update new spouses and children.  Binding nominations are usually only valid for three years, so you need to ensure this is reviewed regularly.

Taxation Consequences
When making allowances for your Super Death Benefits is it important to take into consideration the taxation consequence of any decision you may make.  Non dependant beneficiaries are liable to pay taxes of up to 30% on any lump sum death benefit they receive.  This has the potential to become a costly matter and an unpleasant surprise for loved ones.