Nominating a beneficiary allows the trustee of your superannuation fund to know where to pay your super death benefit when you die.
Ideally you would make a nomination to guide the trustee. However, in the event that no beneficiary is nominated or if your nominations are non-binding, the trustee can choose to pay your death benefit to any of the eligible persons, including: your spouse (including a de facto); your child or children; your estate; and a person with whom you are in a relationship of interdependency or who is financially dependent on you.
If you make no nomination, the trustee will typically write to your executor and your spouse and children, asking if they wish to make a claim for the death benefit, and asking who else might be eligible to receive it.
Each super fund has its own rules and processes to determine the most appropriate beneficiary. Where there is a surviving spouse or young children, the death benefit is often paid to them in priority over adult non-dependent children. If you have no spouse, children or dependants, it will be paid to your estate.
Cameron Cowley, senior associate, Paxton-Hall Lawyers