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Brenton Burke

Sep 28, 2021

Death Benefit Lump Sum

in SMSF Technical Forum

Hello,

A Superannuation Fund had a member that passed away and the member had not provided the fund with either a binding or non binding nomination.

The surviving spouse (being the sole Director of the corporate trustee) has paid out the benefits as a death benefit lump sum to herself.

In regards to this:

- 7 payments were made, so a breach of SISR 6.21(2) has occurred, is this a reportable breach under SISR 6.17?

- To reduce our exposure in case a beneficiary appears, do we qualify Part A of the Audit Report stating that the surviving spouse in her role as sole director of the corporate trustee paid out the Superannuation Fund to herself and we have not been provided evidence that other beneficiaries may exist?

Thanks,

Brenton

6 answers1 reply

Comments (7)

Brian Roughley

Oct 01, 2021

My understanding is the decision as to the disposition of a death benefit resides with the Trustee of the super fund. Where there is a valid BDBN accepted by the Trustee then that is decisive. The super payment is not directed by the Will so I disagree with the idea that the auditor is required to review the Will.

Campbell McCart

Oct 02, 2021

Replying to

Yes, I agree with Brian. No reason to see the will. I also believe that it is left in the hands of the trustee to make the decision as to how to pay out.