A superannuation death benefit nomination is an important legal tool that allows a superannuation fund member to direct how their superannuation benefits will be distributed upon their death. Unlike other assets, superannuation does not automatically form part of a person’s estate. Instead, it is held in trust by the super fund, and without clear instructions, the fund’s trustee determines how the benefits are distributed.

Types of Death Benefit Nominations

There are two primary types of nominations a member can make:

• Binding nominations – A binding death benefit nomination (BDBN) legally requires the super fund’s trustee to distribute the benefits exactly as specified by the member. These nominations must generally be renewed every three years unless they are classified as non-lapsing and accepted by the fund.
• Non-binding nominations – A non-binding nomination serves as a guide for the trustee, but the final decision rests with them. The trustee will consider the nomination alongside other factors, such as the financial dependency of potential beneficiaries.

What Happens if There is No Valid Nomination?

If a person dies without a valid nomination, the superannuation fund’s trustee must decide how to allocate the death benefit. Trustees typically distribute benefits to dependents, which can include:

• A spouse or de facto partner
• Children, including adult children
• Financial dependents
• A person in an interdependent relationship with the deceased

Alternatively, the trustee may choose to pay the benefit to the deceased’s legal personal representative, meaning it will be handled as part of their estate and pass in accordance with the terms of their will.

Failure to have a valid nomination in place at the date of death can cause delays in distribution and may increase the risk of disputes among potential beneficiaries, particularly if multiple individuals claim financial dependence.

The Role of an Attorney Under an Enduring Power of Attorney

If a superannuation member loses mental capacity due to illness, injury, or age-related conditions, an attorney under an enduring power of attorney (EPA) may be able to act on their behalf in managing financial affairs. This can include renewing or maintaining an existing binding death benefit nomination. However, laws vary across Australian states and territories, and not all super funds allow an attorney to make or renew nominations. Some funds explicitly prohibit attorneys from making new nominations but may allow them to renew existing ones.

Given the complexities of superannuation and estate planning, legal and financial advice is recommended to ensure that nominations remain valid and aligned with the member’s wishes. This is especially important where the attorney’s decision to renew a nomination could personally benefit them or their family members, as this creates a conflict of interest which an attorney has a duty to avoid unless the enduring power of attorney document expressly authorises the attorney to enter into conflict transactions.

Contact Us

If you have questions in relation to superannuation death benefit nominations, contact us to book an initial consultation with one of our experienced lawyers, and we will provide you with tailored advice with respect to your unique circumstances. Call 1800 957 936, email mail@rmolaw.com.au or submit an enquiry on our website.

We are available to meet with you at any of our local offices (Brisbane, Gold Coast, Beenleigh, Cleveland and Jimboomba) or by telephone or video-conference.

This article is for your information and interest only. It is not intended to be comprehensive, and it does not constitute and must not be relied on as legal advice. You must seek specific advice tailored to your circumstances.

Lucinda Tabulo
Lawyer