Making a beneficiary nomination can help to ensure your super is paid to the people you want if you pass away. Here’s how they work and some key things to consider.

What happens to your super when you die?

Superannuation is treated differently to many other assets when you pass away. Legislation limits who super fund trustees can pay the ‘death benefit’ to. Options include your estate or directly to eligible dependants, such as a spouse, child, financial dependant or someone with whom you share an interdependent relationship. You can also complete certain nominations that will either bind or guide the trustees when paying out your super.

Estate vs direct beneficiary payment

Another key consideration is whether it’s best to nominate your estate or specific beneficiaries.

If you go with your estate, the money will be dealt with according to your Will. This may suit if you want the funds to go to someone who can’t receive your super directly. Also, you may include provisions in your Will to direct the money into a testamentary trust, which may offer asset protection and tax planning benefits for your estate beneficiaries.

However, it’s important to note that Wills can be contested. So if you’re concerned about potential disputes, a binding or reversionary nomination may help ensure your super goes directly to your chosen eligible beneficiaries.

Keep your nominations up to date

Life events (like marriage, divorce or the birth of a child) or a change in estate planning goals could mean it’s time to update your nomination. Regular reviews can ensure your super plans stay aligned with your current wishes.

Seek advice

Your Financial Planner can help you understand your nomination options and who can benefit. They can also review any existing nominations to make sure they’re still suitable.

Beneficiary nomination options

Generally, there are three types of beneficiary nominations, although not all funds offer all three. These are:

Binding nominations that the fund trustees are legally required to follow. Some are lapsing – which expire after three years unless renewed – while others are non‑lapsing and remain in place until you update or revoke them.

Non-binding nominations which act as a guide for the trustees, who will consider your wishes, but retain full discretion to decide which eligible beneficiaries are paid.

Reversionary nominations, which you can choose if you’re receiving your super as a pension and want the income payments to continue to be paid to an eligible beneficiary.

The best option for you will depend on your personal circumstances, who you would like to benefit and your broader estate planning goals.