It is so important to consider who will inherit your superannuation (super) if you die before you retire. Your super won’t automatically go to your next of kin – you actually have to nominate who you want to receive the benefit.

In the event of your death, the Trustee of your super fund is required to pay your super to your beneficiary or, where there is no eligible beneficiary, to any person who has a fair claim.  

Most super funds enable members to complete either a preferred beneficiary nomination (a guide for the trustee on how to pay your super) or a binding death benefit nomination (a BDBN, which binds the trustee to pay your super to your nominated beneficiaries).

Your beneficiary must be a dependant or your legal personal representative (your estate). A dependant under Australian Superannuation Law, is a spouse (including a defacto) any child (including adopted and step-children) and any person in an ‘interdependent’ relationship with you. An interdependent relationship is if you share a close personal relationship, live together, provide the financial support, or domestic care and support.

When making your nomination, consider how the benefit will be paid. For a dependant, the benefit is paid directly to the person and does not form part of your estate, while for a legal personal representative it is paid directly to your estate and dealt with according to the terms of your Will. If you are wanting your super to go to someone else, such as your parents, you should arrange your Will to cater for this.

It is also worth noting that while your Super trustee must pay the benefit to your BDBN, the trustee is not bound to do so for a preferred beneficiary nomination. In most cases they will give the benefit to your preferred beneficiaries, but your nomination may be reviewed to find a more appropriate eligible beneficiary.

A few other things to consider: there is no maximum number of beneficiaries allowed, and you are able to amend or cancel your nomination at any time. It is important to keep your death benefit nomination up to date, because in the event of your death, the trustee will have to follow the nomination, even if your circumstances have changed


Partners Kelly Dwyer, Chris Parker and Edwina Rowan lead the team at Charltons Lawyers, Bundaberg’s longest-serving law firm.