Binding death benefit nominations explained
Your super doesn't automatically pass through your will. A binding death benefit nomination tells the super fund where it goes.
A binding death benefit nomination (BDBN) is a legally binding instruction to your super fund trustee about who receives your super death benefit. Without one, the trustee uses discretion – which can produce results that don’t match your intent, even with a clear will.
Why super is separate from the will
Superannuation is held by the super fund trustee, not the member. On death, the trustee decides who receives the benefit, guided by trust law. The will doesn’t control super unless the BDBN directs the benefit to the estate.
Who can be nominated
A BDBN can only nominate dependants (spouse, children, financial dependants) or the legal personal representative (the executor, who then distributes per the will). Non-dependants can be paid through the estate via a BDBN to the LPR plus a will direction.
Lapsing vs non-lapsing
Most BDBNs lapse after 3 years and need renewal. Some funds offer non-lapsing BDBNs that remain valid until revoked. Always check your fund’s specific rules – a lapsed BDBN reverts to trustee discretion.
Tax implications
Super paid to tax-dependants (spouse, minor children) is tax-free. Super paid to non-tax-dependants (adult independent children) attracts 15-30% tax depending on components. Strategic nominations can reduce overall tax.
Coordination with the will
The BDBN and the will should work together. If the BDBN goes to a tax-dependent spouse, the will doesn’t need to address super. If the BDBN goes to the estate, the will controls the distribution and tax outcomes shift.
Summary
Your super doesn’t automatically pass through your will. A binding death benefit nomination tells the super fund where it goes.
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Disclaimer: This article is general information only and does not constitute legal advice. Estate planning is deeply personal - every family's circumstances are different. For advice specific to your situation, please contact Rosewood Succession Solicitors.