Posted by: Kylie Wilson
On the 25th of March 2015 the Supreme Court of Queensland delivered a Judgement in the matter of Munro & Anor v Munro & Anor [2015] QSC 61.
The Court declared that a Binding Death Benefit Nomination
form signed by Barry Munro was not binding because it did not comply with the
terms of the trust deed for the Barry and Suzie Super Fund.
This meant that the trustees of the Barry and Suzie Super
Fund after Barry Munro's death were able to distribute Barry's death benefit at
their discretion and not in accordance with the binding death benefit
nomination form that had been signed by Barry John Munro on 22 September 2009.
Interestingly, the Court distinguished the well-known case
of Donovan v Donovan by determining
that although the relevant clause of the trust deed required that a binding
nomination comply with the "Relevant Requirements" this did not
require the Binding Death Benefit Nomination to comply with Regulation 6.17A of
the Superannuation Industry (Supervision) Regulations. The Court also confirmed that Regulation
6.17A does not apply to Self Managed Superannuation Funds unless the trust deed
for the Fund requires that a BDBN comply with that regulation.
Notwithstanding this, Mr Munro's Binding Death Benefit
Nomination form directed his death benefit to be paid to "Trustee of my
Estate" and the Court determined that this nomination did not comply with the
relevant clause of the trust deed for the Self Managed Superannuation Fund as
this was not a nomination of either Mr Munro's executors under his Will or any
of his "nominated dependants" and was therefore not a binding
nomination for the purpose of the relevant clause in the trust deed.
The case highlights again the importance of ensuring that a
Binding Death Benefit Nomination is in fact binding in accordance with the
terms of the trust deed of your SMSF if you wish to ensure that your death
benefits are to be paid in accordance with that Binding Death Benefit
Nomination.
