I have just received a letter from my Superfund saying that my Binding Death Benefit Nomination is about to expire. Glad that I am that it is not a warning that I too am about to expire, I had not appreciated that the form I filled in some years ago was only effective for three years. I had to fill in and post a new form notifying my super provider of my nominations to ensure my nominations are “updated” in accordance with my instructions.
For those who haven’t yet had to think about this (and no-one much likes to think about dying or what happens to what we own afterwards, in my experience) a Binding Death Nomination is a signed form by which you (the contributor to your super fund) tells the trustee who is to receive the benefit of it. And the trustee is bound by your nomination. Instead of that, you can have a Non Binding Death Nomination, which as the name so eloquently describes, lets you say who you would like to have your money – but doesn’t bind the trustee of your fund. The trustee can just consider your preference.
Why do I write a blog about this? Well, recently a dear friend died at a young age of cancer. Like so many, she had not wanted to confront the reality of what was happening and had not put into place the legal measures to protect her sister, who she wanted to be her next of kin. Wanting to do anything I could to help, when she finally asked me to help get her affairs in order, I ran around in the couple of days before she died organising for a will to be prepared on her behalf and executed by her in her hospital bed. I also arranged for her to sign a Binding Death Benefit Nomination to ensure that her sister, the next of kin who she wanted to be protected when she was gone, would receive the benefits from her super. Had this not been done, it would have been up to the trustee of the super fund to decide where my friend’s super benefits would go. Whilst they might have been guided and assisted in some way by looking at her Will and where she had left things, or by seeing her Non Binding Death Nomination, they would have not have been bound. I was told over the phone that it could take a couple of years for a decision to be made by the trustee where there was no Binding Death Benefit Nomination. In fact, it got worse, as the Binding Death Benefit Nomination needed to actually be received by the super fund before the death of the member (not just posted before her death) so a cousin of my friend drove into the city at that incredibly difficult and emotional time in order to lodge the Binding Death Benefit Nomination and put my friend’s mind at ease. All followed as sadly anticipated but at least my friend was able to leave her sister well looked after and remove that concern.
In another case I have been involved in, a husband who knew he was dying thought he had left his home and assets to the beautiful young wife and daughter he was leaving behind. He signed a Will to that effect. However, when he died it transpired that most of his assets were in his super fund. As he had previously signed a binding death nomination leaving all to his mother (before he met his wife), his widow and child missed out. His incorrect assumption that his Will would be effective to determine what happened to his super is one that I have since become aware others share.
It got me thinking about how many people do not realise how much power they are leaving in the hands of the trustee of their super funds if they do not fill out a Binding Death Benefit Nomination form and make that decision themselves. Here then is a call to arms: if you have money in superannuation check today to see if you have signed a Binding Death Benefit Nomination form. If you haven’t, do it and post it. And if you signed one a while ago check to see if it might be about to expire.
Get those ducks in a row today!