Beneficiary

Defining ‘beneficiary’ for purposes of this article

A beneficiary is a person who has a legal right to the use or enjoyment of an asset.  Registration of the asset in his or her name is unnecessary. They have the right to ‘benefit’ from those assets.

Why you should show interest in nomination of your beneficiaries

Formally naming beneficiaries in relevant documents enables them to enjoy that status in Trust and Estate situations. For instance –

• nomination in a Will for bequest purposes; but
• may initially have recognition eligibility by ‘class’ in Trust situations (whether the Trusts are within estates or otherwise).

[A ‘class’ in this instance may include:

The strongest evidence of nomination is a named in the forming document.  As mentioned above,  beneficiaries become entitled to a benefit by virtue of being within an allowed class.  The trustee must record a resolution specifying which person(s) from that class is/ are to benefit at the relevant time. Trustee resolutions veracity is supported when documented.

Where might you need to consider nominating a beneficiary/ies?

Most of us will need to consider the nomination of a beneficiary (or set of beneficiaries).  Situations in which we may well have already done so, include:

• life insurance policies;
• Superannuation accounts; or
• Last Will and Testament.

In considering nomination of beneficiaries, you may need to consider –

• the taxation consequences of their nomination,
• particularly if a sense of equality is intended for a particular group (or class) of beneficiaries.

Nomination in life insurance policies may be obviated if the intended beneficiary is the owner of the policy. As a beneficiary under a superannuation account who would become entitled to any of your superannuation death benefits –

• their entitlement may be subject to the discretion of the trustee, alternatively
• a Binding Death Benefits Nomination¹ will ensure their succession.

Avoid unintended consequences for your beneficiaries

As part of the Estate Planning role we perform at Continuum Financial Planners Pty Ltd –

• we provide guidance and advice to clients,
• in relation to the appropriateness of particular beneficiary nominations: however,
  • whilst many circumstances seem appropriate in the lifetime of the benefactor (you),
  • unintended consequences for the distribution of your estate arise if
  • inadequate consideration is given to your personal succession nominations.

Adequate provision,

estate equalisation, and

discouraging estate challenges,

are areas impacted by your nominating of beneficiaries – and

• where appropriate, a legal adviser may need to be  engaged to provide that advice.

Our advisers are able to refer you to an appropriately experienced specialist in these matters. To arrange an appointment with one of our advisers –

• phone 07-34213456, or
• at your convenience, use the lnked Book A Meeting facility.

(This article was first posted by us in January 2010. We occasionaslly refresh/ update it, most recently in March 2025.)