How long can Binding Death Benefit Nominations last for?
The High Court’s decision
On 15 June 2022, the High Court unanimously dismissed an appeal from a decision of the Court of Appeal of the Supreme Court of Western Australia, in the case of Hill v Zuda [2022] HCA 21. This concerned the operation of reg 6.17A of the Superannuation Industry (Supervision) Regulations 1994 (Cth). That regulation relevantly prescribed standards for how a member of a regulated superannuation fund is to give notice requiring the trustee of the fund to pay the member's benefits to a nominated person on or after the member's death. The primary issue in the appeal was whether reg 6.17A applied to a self- managed superannuation fund (SMSF). The High Court held that reg 6.17A, properly construed, did not apply to an SMSF. The full judgment of the High Court can be found here.
What does this mean for your SMSF?
In practice, this decision means that Binding Death Benefit Nominations in SMSFs can last more than three years subject to the terms of the SMSF’s governing Deed. This decision is a timely reminder to review existing Binding Death Benefit Nominations and SMSF’s Deeds to ensure that they provide for Non-Lapsing Binding Death Benefit Nominations, as well as to ensure they are valid and reflect your wishes and circumstances.
For more information about SMSFs and Binding Death Benefit Nominations please contact HopgoodGanim Lawyer’s Superannuation Team.