A couple of weeks ago there was a post in relation to superannuation nominations.
As mentioned in that post, where there is a valid BDBN, the trustee has no discretion to pay death benefits other than in accordance with the notice.
Based on recent client situations we have seen, a few critical points to remember in this area include the following:
1. If a member’s circumstances change and they have failed to update their BDBN, it will, subject in some situations to automatic lapsing (for example, every three years), continue to be binding on the trustee.
2. The trust deed for the superannuation fund must allow for a BDBN to be given to the trustee of the fund – even some recently set up deeds do not always have such a provision.
3. Unless specifically provided for in the deed, a BDBN will often need to be ‘refreshed’ every three years. An alternate approach is to update the trust deed for the fund to ‘hardwire’ the nomination into the deed, avoiding the requirement to regularly refresh the nomination.
Until next week.
