The importance of BINDING Beneficiary Nominations
OK . . so you have nominated a beneficiary for either your
Superannuation Fund or your Insurances through Super
but is the nomination BINDING ??
The importance of a Binding Beneficiary Nomination
If your beneficiary nomination is not binding, the family member you have nominated could have a legal battle on their hands when it comes time to collecting the beneficiary payout.
This could affect the beneficiaries you have nominated for your Insurances through Super and/or your Superannuation Funds. If your nominations are NOT binding the Insurance or Superannuation Company you are with can choose to leave the payout decision to a Trustee for your policy/account. If this happens it could take a lot longer to approve the claim and the Trustee makes the decision who receives the payout.
Any member of your family, past or present, is able to apply to claim part there of or even the whole amount of your benefit. The Trustee may conclude another family member is just as entitled to the benefit, so if your nomination is not binding the person who you thought you provided for may end up with little or no benefit paid to them, not to mention the extra strain battling for their share of the benefit whilst struggling with the difficult changes already affecting their lifestyle because you are no longer there for them.
To manage a binding nomination is virtually no different than a non-binding nomination with the exception that every few years the Insurance or Superannuation Company will ask you to check your beneficiary nomination to confirm it is up to date, which is actually an added bonus. So check your beneficiary nominations to ensure they are binding and if not ask your Insurance or Superannuation Company to do this for you. If you have a Personal Adviser they can also assist you to update your details.