What is the difference between a binding and non-binding death benefit nomination for super in Australia?

When you die, your superannuation is not automatically part of your estate — your super fund trustee decides who receives your super death benefit unless you have made a valid nomination. Understanding the difference between binding and non-binding nominations is critical for estate planning.

Non-binding nomination (preferred beneficiary): This tells the trustee who you would prefer to receive your super, but the trustee is not bound to follow it. The trustee will consider your nomination but can pay the benefit to someone else (e.g. a dependent) if they think it is appropriate. Most funds offer this as a default.

Binding death benefit nomination (BDBN): If valid, the trustee must pay your super to the nominated beneficiaries in the proportions specified. You can nominate your spouse, de facto partner, children (including adult children), financial dependants, or your legal personal representative (i.e. your estate, to be distributed via your will). BDBNs must typically be renewed every 3 years or they lapse — becoming non-binding again.

Non-lapsing binding nominations: Some funds offer non-lapsing BDBNs that do not expire after 3 years. Check your fund's trust deed to see if this option is available. SMSFs can use non-lapsing BDBNs if the trust deed permits.

Why it matters: Without a valid binding nomination, delays can occur and your super may not go to the person you intended. This is particularly important in blended families, second marriages, or where you want adult children to receive the benefit rather than a surviving spouse.