Creating a binding death benefit nomination
A binding death benefit nomination (BDBN) is a written notice provided to the trustee of a super fund which explicitly nominates a beneficiary for the super benefit in the case of the fund owners death.
Individuals can choose to nominate either a dependent or a legal personal representative to receive the contents of their super fund. Dependents can be a spouse, child, or any other person(s) who could be seen as financially dependent on you at the time of death. Nominating a legal personal representative means the super benefit will become part of the individual’s assets and will be distributed as dictated by their will.
A BDBN is valid if:
- The member has named dependent(s) or a legal personal representative as the beneficiary.
- Requirements in the Superannuation Industry Supervision Act 1993 (Cth) have been met.
- The superannuation fund acknowledges acceptance of the BDBN.
- The allocation of benefits has been clearly set out, with everything from the fund being allocated.
- The nomination has been signed and dated by the owner of the fund (not a legal representative) and two witnesses who are over 18 and not receiving benefits.
Some funds also offer the choice between a lapsing and non-lapsing binding nomination. Lapsing nominations must be renewed or reviewed after a certain period, in most cases three years. Non-lapsing funds, however, are permanent unless changed or reviewed by the owner.
Members should note that not all super funds offer the option for BDBN and individuals can only make a nomination if their fund allows them to. Other funds may not offer a choice between lapsing and non-lapsing nominations.
Contact us to learn more about eligibility and whether a BDBN is a good move for your future planning.