What Is a Binding Death Benefit Nomination?
|What Is a Binding Death Nomination?
In the world of financial planning there are a myriad of terms that planners use, which can sometimes be confusing.
One of these terms is “A Binding Death Nomination”. What is it and why is it a critical part of your planning process?
A Binding Death Nomination is a written declaration to the trustee of your superannuation fund outlining who you wish to be the beneficiary for your superannuation entitlements in the event of your death.
This is a nomination that the trustees are obliged to follow. You may only nominate a spouse, child, someone who you held an interdependency relationship with, or a financial dependant.
It is important to review death benefit nominations regularly and to include full details of your beneficiaries – including their relationship to you, their full name and their address.
Keeping your super fund trustee informed of any changes to your beneficiaries – or changes to their personal details – will make the task of distributing your super much less complex for all involved.
It’s also worth noting that binding death benefit nominations are only valid for three years – so make sure you update your nomination regularly.
To be valid, a binding death benefit nomination must be:
· Signed by you; and
· Witnessed by two persons who are not beneficiaries of the nomination; and
· Contain a declaration signed and dated by the witnesses that the nomination was signed in their presence.
Why is a Binding Death Nomination important?
Superannuation accumulates over time and can form a sizeable portion of your asset base for retirement planning purposes.
Also, sad but true, family relationships change. So keeping these affairs up to date is really important.
Where to from here?
Call us on (08) 9256 3788 to arrange a discussion or email us at firstname.lastname@example.org and we’ll meet with you to discuss your needs.
None of the above has been prepared without considering your personal objectives, financial situation or needs. Therefore, before acting on it, please consider if it is appropriate to your specific circumstances. You should also seek advice from your tax adviser in relation to tax matters and you should seek legal advice from your lawyer in relation to legal matters.