24 November 2017
Death benefit nominations
When making a binding death benefit nomination for a self managed super fund can you provide for an alternative nomination if the first nomination fails, even if the standard form attached to the deed provides for only one nomination adding up to 100%?
I guess what I'm asking is can you use your own more comprehensive binding death benefit nomination form that, with alternative beneficiaries, identifies specific assets to be paid to particular beneficiaries, and the manner in which the benefit will be paid?
Thank you for the question.
The following is an extract from our Superannuation guide:
On the death of a member benefits can only be paid to the estate of the member or a SIS dependant of the member being spouse or children or a person in an interdependency relationship with the deceased, being a close personal relationship between two people who live together where one or both provides for the financial, domestic and personal support of the other.
A SIS dependant principally means your spouse and children or any person who is in fact dependant on you for financial support. However, there are adverse tax consequences in paying the death benefit to children over the age of 18.
The question suggests a course of action to consider is to leave the benefits to the estate and make the provisions required in the will. However, the nomination can stipulate the proportion of the benefit to be paid to any one beneficiary and nominate another in the event that nominated beneficiary pre-deceases. Our precedent nomination is drafted accordingly.
The benefits must be paid in accordance with the governing rules of the fund and the SIS Act.
Regards
Mentor
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