In large super funds, binding death nominations and reversionary pensions may often offer similar certainty. In SMSFs, however, trust deed validity can make things more complicated.
The Key Risk:
A binding death nomination may appear valid when signed — but only be tested for legal validity at death.
Potential Problems:
- Incorrect witnessing
- Trust deed mismatch
- Lapsing nomination issues
- Missing technical requirements
Real Example:
As highlighted by the Donovan v Donovan case referenced in the guide, invalid nominations may lead to unintended outcomes.
Why Reversionary Pensions Can Help:
Because reversion is established when the pension begins, it may reduce future disputes if correctly structured.
Bottom Line:
For SMSF families, certainty often depends not just on intention — but on technical execution.
Reviewing Your SMSF Estate Planning Arrangements?
In SMSFs, the effectiveness of a binding death benefit nomination or reversionary pension often depends on proper structuring and technical validity. Small errors in documentation or trust deed compliance may create significant issues later.
Contact us to discuss your SMSF estate planning and superannuation strategies.
Disclaimer and Warning
The information above is of a general nature only. It should not be used as a source to make financial decisions. It’s also important to note that the legislation and figures related to this topic tend to change regularly and therefore the information above may not reflect the current status. We recommend that if you are looking for advice on this matter, you should contact us.