What is a DBN?
A DBN instructs the Trustee of your self-managed super fund (SMSF) or corporate super fund how to pay your super benefits in the event of your death, and accountants in Sydney can provide guidance.
Who can I nominate?
Only your dependants are eligible:
- your current spouse (including dae facto and same-sex)
- your children (including step, adopted or ex-nuptial)
- any person financially dependant on you
- any person in an interdependent relationship with you
- your legal personal representative (the executor of your estate)
What happens if I nominate adult children rather than my spouse?
Although adult children can be nominated, they are not classified as ”tax dependants” under tax law, so nominating them may not be tax effective.
What are my options?
- Do nothing – the trustee of your super fund will decide whether to pay your benefits to your deceased estate or your dependants.
- Make a death benefit nomination – making a non-binding nomination is your opportunity to let your trustee know who you would prefer to take your benefits.
- Make a binding death benefit nomination – this obliges the trustee to pay your benefits in amounts and proportions you specify.
Will a binding nomination lapse and require renewal?
Generally, death benefit nominations must be renewed every 3 years. However, the ATO has confirmed that the regulations imposing the 3-year renewal do not apply to SMSFs.
Can I just let my Will deal with all this?
No. Your superannuation interests are not part of your estate. The trustee of your superannuation fund determines your death benefits.
A death benefit nomination is a very important part of your estate planning requirements, and we suggest you consider including one as part of your overall estate planning strategy.
It is essential that you make the correct choices and complete the necessary steps to ensure that these choices are legally enforceable.
Please call us if you would like to discuss this further or need some guidance.
*Correct as of July 2015
*Disclaimer – Kreston Stanley Williamson has produced this article to serve its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas in this article, you must seek advice about your circumstances. Liability is limited by a scheme approved under professional standards legislation.