Types of beneficiary nominations
Types of beneficiary nominations
You do not have to make a nomination of beneficiaries, but if you choose to do so there are three types to choose from - no additional fees apply. While the Trustee will take into account any non-binding nominations and your current Will when distributing your super, they must follow your instructions if you have a valid Binding Nomination or Reversionary Nomination in place when you die.
Binding nominations
Things to consider about binding nominations:
- You can nominate as many dependants as you wish, in whatever proportions you like (to a total of 100%)
- They expire after 3 years and become a non-binding nomination unless you update it - we'll remind you as it comes close to expiring
- You must have the form witnessed by two adults who are not named as your beneficiaries
- It will direct how your money is spent, as long as it was legally valid at the time of your death
- It may be useful in Estate planning, especially if dealing with dependants from prior relationships
- When nominating your Estate or legal personal representative, be aware that your super may then be used to pay down estate debts or remunerate your Executor/legal adviser and may not get the same tax free status as a payment to a financial dependant might
- Your nomination becomes invalid if you divorce a beneficiary or a beneficiary dies
- You may be able to better divide your estate in a tax effective manner (eg leave your super to children under 18 and non-super to adult children)
- A binding nomination will apply to all AvSuper accounts held in your name (unless a reversionary nomination is in place)
If we receive an invalid binding nomination from you, we will let you know it is invalid and consider is as a non-binding nomination until a valid binding nomination is received.
Non-binding (or preferred) beneficiary nominations
The Trustee will have the final say in how your money is distributed but will take your non-binding beneficiary nomination and/or Will into account in making its decision.
Things to consider about non-binding beneficiary nominations:
- You can nominate as many dependants as you wish, in whatever proportions you like (to a total of 100%)
- The Trustee has the final say in how your money is distributed, taking the law and your nomination into consideration
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The Trustee is required by law to distribute your money to your financial dependants (or interdependants) where these are present, and this may exclude non financial dependants from the distribution
- It does not expire but you may want to update it periodically such as when you marry, divorce or have children
Reversionary nominations (for income stream members only)
When you start an income stream, you can choose to nominate your spouse as a reversionary beneficiary which allows your spouse to receive your money as an income steam or as a lump sum.
Things to consider about reversionary beneficiaries:
- You can only do this when you open an income stream account
- It is binding on the Trustee
- It is does not need updating and is difficult to change
- Only your spouse (including a same-sex or de facto spouse) can be nominated
- It automatically ends if your spouse dies before you
If you later want to add or change your reversionary beneficiary nomination, a full withdrawal and rollover into a new income stream may suit your needs (note there are no exit or entry fees with AvSuper income streams).
