Will LawyerBinding Death Nominations (I heard it on the radio)
Binding Death Nominations need to be completed carefully if they are to be effective.
It is also important to consider who is being nominated as a beneficiary – otherwise there can be unwelcome tax consequences.
A recent superannuation case decided Binding Death Nominations cannot be disclaimed and the parties involved were caught with the unwelcome tax consequences as the nominated beneficiaries were not death benefit dependents and receipt of the benefit was subject to tax.
The Binding Death Nomination in that case was made by the SMSF member on the basis of “comments heard on a radio station.”
It is best to take proper advice as to who you can and should nominate to benefit under a Binding Death Nomination. In fact you should consider whether a Binding Death Nomination is appropriate at all. It might be better to allow for greater flexibility. In any event, it is not “set and forget”. Regular review is best practice.