How Binding is Your Binding Death Benefit Nomination
A recent case considered by the Queensland Supreme Court Williams v Williams & Anor [2023] QSC 90 has highlighted the importance of taking all of the required steps to ensure a binding death benefit nomination is valid and capable of giving a legally binding direction to the trustee of a superannuation fund for the payment of death benefits following the demise of a superannuation fund member.
Binding Death Benefit Nominations, if valid, will ensure that superannuation benefits are paid to a named beneficiary following the death of superannuation fund member. There are strict requirements for the completion of Binding Death Benefit Nomination forms, and their renewal, including the categories of people who can be nominated.
However, as the case of Williams has reminded us, Binding Death Benefit Nominations must be returned to the superannuation fund in the correct manner if they are to be binding on the fund. In that case, the superannuation fund member had completed a Binding Death Benefit Nomination for their interest in a self-managed superannuation fund. They were one of 2 trustees of the fund. Whilst the member trustee filed the document, they failed to deliver a copy (called service) to their co-trustee. As a result, the nomination was not legally binding and the benefits were not paid as they intended.
