Is your Binding Death Benefit Nomination valid?
Superannuation is a substantial asset for many of us.
The trustee of your super fund is not bound by your Will when you die.
So, it is important to make a Binding Death Benefit Nomination (BDBN) to ensure your super death benefits pass to the right people.
Where your super is with QSuper or any other public fund they have a designated form for BDBN and will, usually, tell you if you have not completed or signed the BDBN correctly.
What happens where you have a Self Managed Superannuation Fund (SMSF)?
A Binding Death Benefit Nomination must comply with the specific requirements of the SMSF’s governing rules, not just the superannuation legislation.
In the recent case of Williams v Williams & Anor [2023] QSC 90 a Binding Death Benefit Nomination was found to be invalid because –
the Trust Deed of the SMSF –
(a) required the Member to give the Trustees a written notice requesting that death benefits be paid to a person or persons; and
(b) required the Trustees to make a written resolution if they accepted the Member’s notice;
the deceased executed a BDBN in accordance with the requirements in the Trust Deed but only gave written notice of the BDBN to one of the 2 trustees (being himself); and
the Trustees didn’t make any written resolution about the deceased’s BDBN.
There are many different forms of SMSF Trust Deed and the requirements for Binding Death Benefit Nominations are different in each one.
This case highlights the importance of having a professional draw your Binding Death Benefit Nomination after reading your SMSF Trust Deed (and all amending documents).
Don't hesitate to reach out to our knowledgeable Succession team if you're unsure about whether you have made Binding Death Benefit Nominations correctly. We understand the importance and intricacies of Self Managed Super Fund trust structures and the need for adherence to the specific requirements.
This article is general in nature and does not constitute legal advice. If you require legal advice in relation to your personal circumstances, you must formally engage our firm, or another firm to provide legal advice in relation to your matter. Bradley & Bray lawyers takes no responsibility for any use of the information provided in this article.
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