What happens when you don't have a Will?
What happens if I don’t have a valid binding death benefit nomination?
You are under no obligation to make a binding death benefit nomination. Where there is no valid binding death benefit nomination, the Trustee must pay the death benefit (or applicable proportion) in accordance with the trust deed provisions in force at the time of your death.
Currently, this generally means that the benefit will be paid to your Legal Personal Representative unless the Trustee:
- Is unable to identify your Legal Personal Representative within 6 months of the Trustee being notified of your death; or
- Has reason to believe your estate is insolvent
If either of the above applies, benefits are instead paid to your spouse or, if none, children in equal shares (where there are more than one). For example, if you have no spouse and two children, both children would receive 50%. Note that a person is only a ‘spouse’ or a ‘child’ if the Trustee is aware of the person’s existence and is satisfied with their status as such. If there is no spouse or child, then the Trustee must pay the death benefit to your Legal Personal Representative (even if the estate is insolvent) or deal with the death benefit under applicable laws relating to unclaimed super.
What about my will? Your will relates to the distribution of any assets that form part of your estate. Therefore only that portion (if any) that is payable to your Legal Personal Representative (either as a nominated beneficiary or in the circumstances stated above where there is no binding death benefit nomination) will fall under the direction of your will. If you have nominated your spouse or children to receive part, or all, of your superannuation monies, then this money will be paid to the individuals directly and will not form part of your estate.
This means that if you wish to change the manner in which your superannuation money will be distributed you may need to request the Trustee change your nominated beneficiaries. It may not be sufficient to include alternate instructions in your will as this money may not form part of your estate. How to set up a valid binding death benefit nomination?
For a valid nomination to be set up: The proportion of your death benefit to be paid to each beneficiary must be clearly set out (and total 100%); The nomination must be signed and dated by you in the presence of two witnesses, both of whom are over 18 years of age and are not nominated to receive a benefit;
- Each beneficiary you nominate must be your dependant or your legal personal representative; and
- The Trustee must receive and consent to your nomination prior to the date of death of the member. Note: A nomination only applies to the death benefit payable under each particular insurance product you hold in the Zurich Plan. Therefore if you hold multiple interests in the Zurich Plan, each with respect to a different insurance product, any subsequent nomination in respect of an interest revokes a prior nomination in respect of that interest only – which may mean you need to make multiple nominations. Once I make a binding death benefit nomination, can I change it?
Yes, you can. Over time your individual situation may change (eg you may marry, enter a de-facto relationship, have a child or someone you have nominated has died) so it’s important you ensure your binding death benefit nomination remains current at all times.
You may revoke or change your nomination at any time by completing a new non-lapsing death benefit nomination form. It will come into effect once the Trustee has consented to it and will then completely replace all previous nominations. Does my nomination expire?
To remain a valid nomination, a nominated beneficiary must still be a dependant at the time of death. You should periodically review each of your nominations to ensure you still wish the Trustee to pay the person(s) you have nominated because it will not automatically become invalid after a fixed period of time. The entire nomination will, however, become automatically invalid in the event of marriage, divorce or entering or ending an equivalent de facto relationship.
Details of any nomination that the Trustee has consented to will be included in your annual statement.