Self-managed superannuation and the binding death benefit nomination - get it right or risk unintend
For many Australians a Self Managed Superannuation Fund is an integral part of their wealth creation and estate planning strategy. Unfortunately, when an SMSF member dies there can be a legal battle over control of the fund and who should receive the death benefit payment. A number of Supreme Court decisions on SMSF disputes underline the risk of unintended outcomes if all elements of the estate plan are not structured to deliver a harmonised outcome.
The recent Queensland decision in Re Narumon Pty Ltd highlights the importance of getting the Binding Death Benefit Nomination right and the limitations of dealing with that direction once a member loses capacity. The key take out is that a Binding Death Benefit Nomination is a critical estate planning tool and should never be regarded as a "set and forget" direction to the superannuation fund Trustee.