Preparing for the unexpected
Life can throw up some curve balls — both good and bad — that can throw us for six. Here are some things we regularly find members need help with.
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You can make sure your super goes to the people you choose. Find out why that might be important to you.
You might have heard about court cases where people have contested the listed beneficiary of a deceased person’s superannuation.
Often these disputes could have been avoided if the member had updated their choice of beneficiary to their super fund while they were alive. And that could have prevented a whole lot of heartache for those left behind.
Although it’s a grim topic, nominating who gets your super when you die and how to update this nomination is one of the most important things you need to know.
Safeguard your super for those you love.
When you open a super account, you can nominate who will receive your money when you die.
These are your beneficiary nomination options.
Non-lapsing binding death benefit nomination:
We must pay your super to the person(s) you choose, if your nomination is valid. This nomination doesn't expire and stays in place until you change or cancel it. This is a good option if you already know who you'd like to leave your super to.
Binding nomination:
We must pay your super to the person(s) you choose, if your nomination is valid. Remember that this type of nomination expires every 3 years – so it’s important you keep it up-to-date.
No nomination:
We decide who receives your super.
Who you can nominate to receive your super
HESTA has a legal responsibility to make sure your super goes to your dependants for superannuation purposes or your legal personal representative.
Your dependants include:
- your spouse - by marriage or de facto
- your child
- a person who is wholly or partially financially dependent on you
- a person with whom you have an interdependency relationship.
Your legal personal representatives include:
- the executor of your will, or
- the administrator of your estate.
For more information on what classifies as a dependant or legal personal representative, read How super works (PDF).
HESTA Income Stream members
If you're a HESTA Income Stream member, you can also nominate a reversionary beneficiary when you begin your income stream. This means your income stream payments will automatically revert to the person you nominate when you die. Find out more in the Income Stream PDS (PDF).
Don’t be a cautionary tale: why it’s crucial to keep on top of your nominations
We often speak to members who want to leave their super benefits to their adult children. In this case, a 69-year-old member made a non-binding nomination to her three adult independent children. She also had a will and an enduring power of attorney. After the member died, her children made a claim to receive their mother’s super benefit. The super fund had to determine if there were any other potential beneficiaries and investigated if there was anyone else who could make a claim.
There was. The member had been living with a de-facto partner for several years. They both had their own children and kept their finances separate. They had also agreed not to claim anything from one another’s estates upon death. And their wills specified these arrangements.
Despite this, the partner claimed against the deceased member’s super. The super benefit – all of it – was paid to the de-facto partner and not to the children. That’s because none of the children were financially dependent on the member at the time of death, and a partner is the most likely person to need super benefits to fund their retirement – which is a key consideration trustees must weigh when exercising their discretion.
So, what could this member have done differently? By making a binding death benefit nomination or a non-lapsing binding death benefit nomination to all three adult children or to her legal representative, she would have provided greater certainty about who received her benefits. A non-lapsing binding death benefit nomination would have stayed in place without needing to be renewed by the member.
The value of advice
This case study is not as uncommon as you might think. Remember, everyone’s situation is different and it’s important you get the right advice about planning your financial future.
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