This will be our last Super Snapshot for 2013; our next edition will be in 2014.

Our SMSF Seminars have been very popular with great feedback – Thank You!
Our next seminars will begin again in February 2014; if you are interested in attending please let me know.

This month covers Binding Death Nominations of SMSF’s. I hope you find it informative.

Wishing you a fabulous Christmas and New Year!
Su-Mei
SMSF Specialist

Binding Death Nominations

Most self managed superannuation funds allow for binding death nominations.

A Binding Death Nomination allows you to govern where your superannuation benefits will be paid upon your passing and must be adhered to when the trustee pays out a death benefit. The difference between this type of nomination and a normal Death Benefit Nomination is that beneficiaries nominated on the Death Benefit Nomination serves as a guide only when the trustee pays out benefits as opposed to the Binding Death Nomination which ‘binds’ the trustee to comply with your wishes.

Who can be nominated on a Binding Death Nomination?

A binding death nomination must nominate a dependant beneficiary or legal personal representative.
Your dependant beneficiaries include:
· Your spouse
· Your children
· Persons financial dependent upon you
· Persons with whom you have an interdependency relationship

Please note that payments to adult children can be subject to tax. In addition, for the nomination to be valid any dependant beneficiaries nominated must still be dependant as at date of death.

Should I have a Binding Death Nomination?

A binding death nomination allows members to have absolute control over to whom their superannuation death benefits are paid. In contrast, if a member were to have a non-binding death nomination or simply not nominated a beneficiary the trustee of the superannuation fund would have discretion over where the benefit is paid. While many members may have a revisionary pensioner in place (meaning that the pension will automatically be passed to the nominated dependant beneficiary upon the passing of the member) self managed superannuation funds which have just one member or have either some or all accumulation monies may wish to consider a binding death nomination.

While superannuation legislation has been updated and no longer requires a new binding nomination to be completed every three years we feel this is a good interval at which to reconfirm your estate plans and ensure that your superannuation balance will be paid in keeping with your wishes; however, we can also prepare non lapsing nominations if you require.

While binding death nominations can provide you with control over where you superannuation benefits are paid after your passing, there are other tools which may be more suitable and used to achieve your goals; for example the use of a corporate trustee.

If you wish to prepare a binding death nomination or would like to discuss your estate planning options with us please call our office on 07 4632 9077.

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