ASFA CEO Ms Pauline Vamos says many people do not think about what happens to their superannuation after death.
A case in the Supreme Court of Western Australian has shown the importance of keeping Binding Death Benefit Nominations up-to-date and in accordance with a will.
To summarise the events and arguments in Ioppolo v Conti  WASCA 45 (10 March 2015), Mr and Mrs Conti established an SMSF, the Conti Superannuation Fund, in 2002. At the time Mrs Conti completed a binding ‘Nomination of Beneficiaries’ as part of the membership application. This document directed her death benefits to be paid to Mr Conti.
The ATO has published two new videos in the continuing efforts to improve trustee knowledge of superannuation and tax rules.
SMSF planning for the unexpected (relationship breakdown, incapacity, death)This video encourages SMSF trustees to think ahead when setting up an SMSF, particularly where events force a change in the fund, such as:
- adding new trustees
- changing the trustee
- winding up the fund
Binding and Non-Binding Death Benefit Nominations form an important part of incorporating superannuation into estate planning, given that a superannuation balance will not automatically form part of a persons estate to be distributed according to their will. However, due to the way nominations are written into the SIS Act and Regulations it is more complicated for SMSFs than APRA funds, though arguably more flexible.
Binding Death Benefit Nomination
A Binding Death Benefit Nomination (BDBN) compels the trustee of the fund to pay a superannuation balance to a nominated person, provided the nomination is valid.