Previous posts have considered various aspects of superannuation nominations, including binding death benefit nominations (BDBN). Some of the previous posts are available below:
1) Superannuation death benefits
2) Superannuation and binding death benefit nominations (BDBN)
3) Double entrenching binding nominations
As with many other aspects of estate planning, whenever considering a BDBN, the starting point should always be the requirements set out under the trust deed. Indeed, a BDBN can only be used where the deed allows one to be made.
Below is an example of some of the requirements that are generally set out in trust deeds before a nomination will be held to be binding, the first three of which are generally required by legislation:
1) must be in writing;
2) must be signed, and dated, by the Member in the presence of 2 witnesses, each of whom has turned 18 and neither of whom is a person mentioned in the notice;
3) must contain a declaration signed and dated by the witnesses stating that the notice was signed by the Member in their presence;
4) will not lapse by the passing of time;
5) may be revoked by the Member by written notice to the Trustee at any time;
6) must contain sufficient details to identify the Member; and
7) must contain sufficient details to identify one or more Beneficiaries for each category of benefits selected.
While almost all trust deeds that allow BDBNs will have provisions along the lines outlined above, at times there will be additional provisions that are not necessarily expected. Some examples in this regard include:
1) a requirement that the trust deed for the superannuation fund cannot be amended in a way that impacts on any BDBN without the consent of each member who has made one;
2) a provision that empowers the trustee to accept amended BDBNs from the financial attorney of a member;
3) the trustee may be required to consider and accept a BDBN before it is valid; and
4) there may be a particular table or form that is required to be embedded into the BDBN, which sets out the percentage entitlement of each beneficiary.
** For the trainspotters, ‘Let Love Rule’ is a song by Lenny Kravitz from 1989.