Certainty for your super

Paul Clitheroe is a founding director of financial planning firm ipac, chairman of the Australian Government Financial Literacy Board and chief commentator for Money magazine. Visit for more information.
Paul Clitheroe is a founding director of financial planning firm ipac, chairman of the Australian Government Financial Literacy Board and chief commentator for Money magazine. Visit for more information.

AS our system of employer paid superannuation continues on, many working Australians will amass a significant super nest egg over their working life. It's important to have certainty over who inherits your super savings if you die prematurely because super cannot be bequeathed to loved ones in the same way as your home or other assets.

Australia has a vast pool of superannuation savings, currently estimated to be worth around $1.3 trillion. We often assume that our super will form part of our estate when we die and that the cash will be distributed in line with our will. But super doesn't work this way.

Unlike other assets that make up our personal estate, your super cannot always be passed on through your will.

Strictly speaking, the trustee of your fund can decide who receives your super if you die, and the trustee's decision may not reflect your wishes.

To be quite sure about who inherits your super, it's worth asking your fund about making a 'binding death benefit nomination'. It's an option many funds offer at no charge.

Binding nomination give you the certainty of naming those dependents you would like to receive your accumulated superannuation.

The key word here is 'dependents', and this normally means your spouse or partner (including a same sex partner), your children or someone else who is financially dependent on you at the time of your death. You can also nominate a legal representative, which for most people is the executor of their estate.
You can choose to split the money between your dependents as you see fit. But it's important to specify exactly how you want the money divided up.

If you don't have a binding nomination, your fund trustee can divide your super savings in the way that it believes is fair.

Unfortunately, making a binding death benefit nomination isn't a set and forget matter. These nominations are only valid for three years so it will need to be updated reasonably regularly.

That's not always a bad thing as our circumstances can alter and you could have a change of heart about who you'd like to inherit your super.

You can adjust your binding nomination at any time but remember, if the nomination expires your trustee may pay out your nest egg as if you had never entered a binding nomination at all. That said, your fund should send you a renewal notice when the nomination is about to expire.

As with many aspects of superannuation, there can be varying tax implications for super payouts received as an inheritance. That makes it worth speaking with your financial adviser or lawyer before making a final decision regarding a binding death nomination.

Organising a binding nomination is a matter of filling in a form provided by your fund, and in many cases you can download the necessary paperwork from your fund's website.  It's worth the effort for the certainty it gives you and your family, and along with having a valid will, it's something that plays an important role in your estate plans.

Paul Clitheroe is a founding director of financial planning firm ipac, chairman of the Australian Government Financial Literacy Board and chief commentator for Money magazine. Visit for more information.

Topics:  clitheroe superannuation

Stay Connected

Update your news preferences and get the latest news delivered to your inbox.

Surfer hit by shark near Byron Bay: beaches closed

A young surfer had a lucky escape after being hit by a shark at Broken Head near Byron Bay. Photo: Twitter - Geoffrey John Knapp.

Male surfer with injuries to his left thigh and leg

25th annual duck race floats in wild winds

LINED UP: Corporate-costumed entrants ready for the Rotary Great Duck Race in Ballina.

Heavy winds ruffled a few feathers

Turtle release turns into shark net debate

POINT OF VIEW: Marine ecologist Professor Daniel Bucher  speaks against shark nets at a rally in Ballina.

Kimba the turtle was released on Sunday

Local Partners

Fundraising continues for Nash family and is $60,000+

FRIENDS have been overwhelmed by the community's generous support for the 35-year-old's husband and daughter.

Barry Gibb is coming to Bluesfest 2017

FANS: Barry Gibb talks to a fan next to a cardboard cutout of his young self.

Aged 70, Gibb has re-launched his solo music career with a new album

Declan Kelly and the Rising Sun to shine bright at festival

Declan Kelly & The Rising Sun is one of the headlining acts at this year's festival.

Main stage set to pump with radiant reggae and dub vibes

Extra time to get your Dolphin Awards nominations in

Dolphin Award trophy.

Open to all unsigned musicians in the (02) 66 phone area code

Check out some fashions from the Coast festival

FASHION: Ocean Zen range.

Images from the Sunshine Coast Fashion Festival show what's hot

Australian Survivor's magician Matt out of tricks

Australian Survivor contestant Matt Tarrant.

SHOW'S power couple looks unstoppable in race to the finish.

Top floor teams take out The Block's terrace week

Kim and Chris pictured on their winning outdoor terrace in a scene from The Block.

RIVALS Kim and Chris and Julia and Sasha tie in final week of work.

Bob Dylan slammed as 'arrogant' for Nobel silence

Nobel Prize winner Bob Dylan.

Singer the controversial winner of literature Nobel

Shannen Doherty reveals fear of dying in post on chemo

Actor Shannen Doherty shared this image of her lying in a hospital bed after a chemotherapy session.

Actor has been fighting cancer since 2015

Eddie Redmayne's stage fright on latest Harry Potter film

Actor Eddie Redmayne stars in Fantastic Beasts and Where to Find Them.

Actor felt like kid again when he got to film with a wand

Hinterland horse stud passed in for $8.25 million

UNREAL: This Maleny estate is incredible.

12-bedroom hinterland horse stud still available

Hit songwriter's Noosa mansion on market

SPECIAL PLACE: The Cintamani estate is going to tender, marketed by Tom Offermann Real Estate.

Is this Queensland's best property?

Kiwi siblings snap up Dotcom mansion for $32.5m

The new toy company owners of the Coatesville mansion want replace any controversy with positivity and fun. Photo / Barfoot and Thompson

The trio paid $32.5 million for the property in June

New $200 million development will create 580 jobs

Cassie And Josh with baby Alfie and daughter Andee. They have bought at new Lennox Head development Epiq.

Majority of new positions will be given to Northern Rivers locals

Cherrabah's mega resort plans axed

PLANS for a massive development at Cherrabah have been scrapped.

Dusit Thani finance crisis 'just a small hiccup'

ON TRACK: Springfield Land Chairman, Maha Sinnathamby, Ipswich Mayor Paul Pisasale, Developer Richard Turner and Springfield Land Deputy Chairman, Bob Sharpless, at the recent resort sod turning ceremony.

Property developer says project remains firmly on track