In our last article we wrote about putting in place your binding death benefit nomination (BDBN) in your superannuation. In this article we would like to refer to superannuation held in a Self-Managed Superannuation Fund, an SMSF for short.

Same as your industry owned superannuation, you can name a beneficiary to inherit your superannuation under your SMSF. This would be done by putting in place a BDBN. When it comes to your SMSF there might not be a standard form that this is required to be in, it would come down to what your SMSF deed declares is the acceptable form for your BDBN. This is where it is important to have a lawyer review your SMSF deed to ensure the BDBN you have put in place meets the requirements of the deed.  If you have a financial advisor who assists you in managing your SMSF, we would be happy to liaise with them in relation to your death benefit nomination.

When it comes to an SMSF, you have the additional option of not making a BDBN and leaving the decision of who will receive the superannuation to the trustee of the SMSF. We stress that this might not be the best option for everyone and that you should obtain independent legal and financial advice.

The following considerations are often taken into account when making a BDBN with regard to an SMSF, specifically, as to who you should nominate as the beneficiary (be it your Legal Personal Representative or a dependant) -

• Who does the control of the fund pass to upon the member's death (this is often the executor of the deceased member)?
• Does the member trust the trustee to implement their directions and obtain the appropriate financial advice at the time of the payment of the superannuation benefits?
• Is there a reversionary pension in place?
• Is there a risk that a family member will bring a claim against the estate?

As part of your estate planning process we can assist you in working through the above questions in association with your financial advisor.

If you have any questions in regards to your BDBN and SMSF or your estate planning, get in touch with our friendly team and they will be able to help you out.