Pension Terms and Death Benefit Nominations Look Before You Leap

It is important not to put pensions or death benefit nominations in place unless you’ve thought very carefully about all the estate planning ramifications.  Don’t simply consider the narrow issues relating to the pension or the nomination but think carefully about the member’s entire estate plan so that these issues are dealt with holistically.

With superannuation becoming more and more a substantial depository of a family’s wealth it is very important to have an eye to the estate planning issues relating to that superannuation.  Those issues have given rise to what has been termed the ‘SMSF Will’.  The term simply applies to the documented strategies that a member might put in place to ensure their superannuation benefits are paid to whom and in the manner they wish as well as being paid in the most effective manner.

Pensions and death benefit nominations can be very detailed, tailor-made documents and are a very flexible and important way of contributing to a person’s estate planning.

For example, the common wisdom is that a member should have a binding death benefit nomination.  Yet there may be very good estate planning reasons for not providing a nomination of any kind or for providing a non-binding nomination.  Similarly the terms of a pension can be varied and specific to the needs of the member, particularly in the context of their death and the reversionary choices that can follow.