Help CentreBinding Death Nomination Defined
A Binding Nomination, often referred to as a Binding Death Benefit Nomination, is a formal declaration made by a superannuation fund member specifying the beneficiaries who are to receive the member's superannuation benefits upon their death. This legally binding document directs the superannuation fund trustee to distribute the deceased member’s superannuation savings and any associated life insurance benefits directly to the nominated beneficiaries in the specified proportions.
Unlike a non-binding nomination, which serves as a guide for the trustees but allows them discretion in the distribution of benefits, a Binding Nomination removes this discretion, ensuring the member's exact wishes are followed. For a Binding Nomination to be valid, it must meet specific requirements set by the superannuation fund, such as being signed, dated, and witnessed properly, and in some cases, it must be renewed every three years to remain effective.
Binding Nominations are crucial for estate planning, as they provide certainty and clarity for the distribution of superannuation assets, helping to prevent disputes among potential beneficiaries and ensuring that the member’s superannuation benefits are distributed efficiently and according to their wishes.
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