Tuesday, March 11, 2014

Double entrenching binding nominations

'Binding' nominations may sometimes be removed. 

In a recent post, we touched on the importance of reviewing a trust deed before making any superannuation death benefit payments.

The 'read the deed' mantra, which is so often used in the context of family trusts, is of similar importance in relation to self managed superannuation funds.

One particular provision to be aware of in this regard is that, even if a nomination (which appears to be binding) is embedded under the deed, unless the provision of that deed has a prohibition against amendment, the intentions of the parties may not in fact be achieved.

For example, the remaining trustees after death could elect to vary the deed (and effectively remove the binding nomination) before ultimately making a death benefit payment.

Until next week.