The Australian Securities & Investments Commission (ASIC) has released a media release putting the financial advice sector on notice about ensuring that binding death benefit nominations (BDBNs) are signed and witnessed correctly.
Specific issues that ASIC has identified include:
- Advisors signing as witnesses for clients when they were not present when the client signed the BDBN
- Backdating BDBNs
- Ensuring the BDBN is correctly executed and witnessed
In addition to the issues raised in the media release, there are further issues with preparing and executing BDBNs that should be considered, including whether:
- The preparation of BDBNs by the financial planner or accountant constitutes legal advice that can only be provided by a quailed lawyer
- The super fund trust deed permits BDBNs to be made
- The super fund trust deed provides that BDBNs will lapse after 3 years
- The BDBN procedure in the super fund deed has been properly followed (eg witnessing and service requirements)
- The super fund trust deed permits cascading appointment of beneficiaries under a BDBN
- The BDBN is consistent with the client’s broader estate and succession plans
- The tax and asset protection consequences of paying death benefits to the proposed beneficiary have been appropriately considered
- The BDBN takes into the new superannuation laws (eg the transfer balance cap)
- The BDBN or a reversionary pension are to take precedence
- An appropriate person will take over the control of the super fund on the death of the client
To discuss this further or for more information please contact:
Phil Broderick
Principal
Sladen Legal
T +61 3 9611 0163 l M +61 419 512 801
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia
E: pbroderick@sladen.com.au
Melissa Colaluca
Associate
Sladen Legal
T +61 3 9611 0161
Level 5, 707 Collins Street, Melbourne, 3008, Victoria, Australia
E: mcolaluca@sladen.com.au
