In the case of Williams v Williams, the Supreme Court of Queensland has determined that a binding death benefit nomination (BDBN) was not binding on the basis that it was not provided to the trustees of the applicable self managed superannuation fund (SMSF).

Prior to his death, the deceased made a BDBN directing the SMSF trustees pay his death benefits 50% to his second spouse and 50% to his legal personal representative (ie his estate). The trustees at that time were the deceased and one of his sons from his first marriage. The SMSF trust deed provided that, in order for a BDBN to be binding, the SMSF trustees must either accept the BDBN by written resolution or provide a notice to the member. Here, the BDBN in question had a “trustee confirmation” that was only signed by the deceased (ie not by the fellow trustee, being the son).

The Court found that the requirements of the SMSF trust deed were not met and that the BDBN was not binding. In particular, it rejected the second spouse’s argument that one trustee could accept the BDBN on behalf of both trustees. The Court determined that both trustees must receive the BDBN (as required by this particular SMSF trust deed).

This case is a further reminder (remember Donovan v Donovan and Munro v Munro), when preparing BDBNs, that the provisions of the SMSF trust deed must be followed and complied with.

Phil Broderick
Principal
M +61 419 512 801 | T +61 3 9611 0163
E: pbroderick@sladen.com.au

Jan Harnischmacher
Lawyer
T +61 3 9611 0158
E jharnischmacher@sladen.com.au