Advisers cutting corners may be making binding nominations invalid: ASIC

ASIC has put the financial advice sector “on notice” for cutting corners on superannuation Binding Death Benefit Nominations (BDBNs), in particular around witnessing.

ASIC says it has become aware of a “widespread practice” among financial advisers of witnessing, or having staff witness, the signing of Binding Death Benefit Nominations by clients without being present. In some cases binding nomination forms have been backdated.

“Each of these practices fails to comply with the law and may lead to the nominations being invalid,” said ASIC. Read more...

Good estate planning avoids arguments after death

estate planning, SMSF, superannuation, binding death benefit nomination (BDBN), SMSF Association state technical conferenceThe purpose of good estate planning is to avoid arguments after a death, according to Cooper Grace Ward partner Scott Hay-Bartlem.

“When estate planning works, it’s when there are no disputes when someone dies. This outcome is best achieved by understanding that when it comes to estate planning, there is no ‘one fits all size’ solution,” Mr Hay-Bartlem told an SMSF Association technical conference.

“What I tell advisers is that they must devise solutions that best suit their clients’ individual circumstances. Every family is different, so as advisers we must work together and with the family to work out the solution that best fits their circumstances. And if there is a self-managed super fund (SMSF) involved, then that must be part of the overall estate plan.” Read more...

Court rules BDBN not binding due to error: Munro v Munro

Binding Death Benefit Nominations (BDBN), Munro & Anor v Munro & Anor [2015] QSC 61, Munro v MunroThe Supreme Court of Queensland has ruled an incorrectly completed Binding Death Benefit Nomination (BDBN) for an SMSF was not binding on the trustees, reiterating the care that must be taken with these documents to ensure they are effective.

The court, in the case Munro v Munro (Munro & Anor v Munro & Anor [2015] QSC 61), said that the BDBN for Mr Munro, a solicitor, was not binding because it did not meet the requirements of the SMSF deed or Superannuation Industry (Supervision) Act 1993 (SIS Act). Read more...