STRATEGY
The common theme in death: part one
More often than not, superannuation is a significant factor when a person dies. In part one of this two-part series, Jemma Sanderson highlights certain actions that can be taken to ensure death benefits are passed on to the right people. With our ageing population, superannuation becoming a significant asset for many Australians and the introduction of the transfer balance cap (TBC) provisions effective from 1 July 2017, there are a plethora of considerations when an SMSF member dies. Importantly, things may not always be as they seem within a fund and it is useful where possible to put all the pieces of the puzzle together before death. JEMMA SANDERSON is a director at Cooper Partners.
BDBNs Fund members may be unconcerned about what happens upon death with their super as they have a binding death benefit nomination (BDBN) in their fund, or the favourite reassuring thought that “it’s okay, it’s in my will”. However, as cases in recent times have shown us, who receives the money
or who makes the decision about the money can rest on the presence or not of a BDBN or similar instruction to the fund. Issues that are often encountered with BDBNs (or similar binding instructions) include: 1. The nomination doesn’t articulate an eligible beneficiary under the Superannuation Industry (Supervision) Act and therefore it is invalid (as demonstrated in Munro & Anor v Monro & Anor [2015]). 2. If the nomination isn’t executed in accordance with the deed, then it will be invalid. 3. Where a nomination is invalid, the deed will then prescribe the decision-making with respect to Continued on next page
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