Take care with Binding Death Benefit Nominations

A recent Queensland Supreme Court case highlights the importance of ensuring that your binding death benefit nomination (BDBN) complies with the requirements of the trust deed for your self managed superannuation fund (SMSF).

In Munro v Munro the Court held that Mr Munro’s BDBN was invalid (and therefore not binding on the trustees) because it nominated the “Trustee of Deceased Estate”.  The SMSF trust deed only allowed a binding nomination in respect of a dependant or legal personal representative.  The technical view taken by the Court was that the required terminology in the nomination was “legal personal representative”.  The result meant that Mr Munro’s second wife, (Patricia) was able to pay the entire death benefit to herself.  Had the death benefit being paid to Mr Munro’s estate, Patricia would have received a bequest of $350,000 with the rest being paid to Mr Munro’s daughters from his previous marriage.
With superannuation forming a large portion of many clients’ wealth, the validity of BDBNs are increasingly likely to be tested.  In the context of your estate planning, it would be wise to consider:

  • who will control your SMSF on your death?
  • who has drafted your BDBN and have they read the trust deed for your SMSF?

Recent Articles

Changes for MYOB subscription holders

18th May 2022

There have been some important changes to MYOB subscription payments. Up until this point, Roberts & Morrow have managed your subscription (practice... Read More

Merger Date & Location Announced

13th May 2022

We would like to provide a further update to clients on our plans in relation to the proposed merger... Read More

All the Winners from the Fleece to Fashion Gala Awards 2022

12th May 2022

The Fleece to Fashion Awards was held at the Deeargee Woolshed on Monday and attracted fashion design entries from... Read More

COVID-related support for SMSFs

27th April 2022

Because of the financial impacts of COVID-19, you (in your role as trustee of an SMSF), or a related... Read More