General / Jul 01, 2025

Estate Planning Reviews for Advisers: When and How to Protect Superannuation Death Benefits

Lepapa Mua
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When to Review SMSF Estate Plans and Death Benefit Nominations: A Guide for Advisers

Superannuation is often a client’s largest asset outside their home. Yet too often, death benefit nominations are left to lapse, misunderstood, or invalid. This leaves room for confusion, conflict, and costly legal disputes.

As advisers, you have the opportunity and responsibility to guide clients through this critical but often neglected area of estate planning.

This article isn’t just about ticking compliance boxes. It’s about protecting your client’s wishes, minimising risk, and giving families clarity at a time they need it most. Drawing from real court outcomes, legislative triggers, and practical experience, this guide will help you know when to act, what to review, and how to prevent death benefit disputes before they start.

What Court Cases Reveal About Real-World Risks

These recent rulings we can use as instructive case studies that every adviser should understand and use in conversations with clients.

1. Williams v Williams (2023) QSC 90

A member made a Binding Death Benefit Nomination (BDBN) in an SMSF, but failed to notify all trustees, as required by the deed.

Despite the form being valid in appearance, the court ruled it invalid. The beneficiary missed out.

Lesson for advisers: A BDBN is only valid if it fully complies with the fund’s deed.
Adviser action: Before finalising any BDBN, check the trust deed for notice or witnessing requirements.

2. Lynn V AFCA (2025) FCA 175

2. Lynn v AFCA (2025) FCA 175

A non-binding nomination was challenged after the trustee reallocated the benefit away from the original plan. AFCA redistributed it between an estranged spouse and the deceased’s children. The court upheld AFCA’s intervention.

Lesson for advisers: Non-binding nominations create uncertainty and room for conflict.
Adviser action: Encourage clients to formalise their intentions through valid, binding nominations.

3. Wan v BT Funds Management Ltd (2022)

A carer argued for a death benefit based on emotional dependency, but the court disagreed. Emotional closeness didn’t meet the legal test of “interdependency.” The benefit went to the estate instead.

Lesson for advisers: Emotional relationships aren’t always legally recognised.
Adviser action: Verify that nominated beneficiaries meet SIS Act definitions (e.g., spouse, child, interdependent).

5 Critical Moments for Reviewing Super Death Benefit Nominations

1. At Onboarding or Initial Planning

When a new client joins your practice or updates their broader financial plan, this is the ideal time to establish a strong foundation for estate planning.

What to review:

  • Whether a BDBN is already in place and compliant.
  • Whether the client wants to nominate dependants directly or use their estate.
  • Alignment between their Will and superannuation nominations.
  • Any rules in their super fund deed that affect nomination options.

2. After Major Life Events

These are the most common and most dangerous times for a death benefit nomination to become outdated or invalid.

Triggering events:

  • Marriage, divorce, or entering/exiting a de facto relationship
  • Birth or adoption of a child
  • Death of a previously nominated beneficiary
  • Changes in financial dependency (e.g. adult children moving back in)
  • Serious illness or terminal diagnosis

Adviser action:
Use life event reviews as a structured check-in, not just for estate documents but to open a deeper conversation around client intentions.

3. Every 2–3 Years: Scheduled Reviews

Even without major life changes, BDBNs often lapse after three years unless renewed or unless the fund allows non-lapsing nominations.

What to check:

  • Expiry dates on current nominations
  • Whether the fund now offers non-lapsing BDBNs
  • Relevance of listed beneficiaries to the client’s current goals

Note: Many clients wrongly assume that “once signed” means “forever valid.”

This is an easy win for advisers to demonstrate ongoing value.

4. When the Super Fund Trust Deed Changes

In SMSFs and some public funds, amendments to the deed can change the way nominations must be executed or who qualifies as a beneficiary.

Adviser action:

  • Monitor deed updates (especially in SMSFs)
  • Alert clients to nomination impacts
  • Revalidate BDBNs after any major structural or trustee change

Example: A change in trustee rules or in how dependants are defined may suddenly render an old nomination invalid.

5. As Clients Approach or Enter Retirement

The transition from accumulation to pension phase often triggers broader financial and tax planning.

But, it should also trigger an estate plan review.

Why this matters:

  • Clients may want to ensure the surviving spouse receives income, not a lump sum
  • There may be tax implications in how death benefits are paid (e.g. to adult children)
  • The super balance may now be part of a broader intergenerational wealth transfer plan

Adviser action:
Revisit nominations alongside retirement income planning, especially when setting up reversionary pensions or commutations.

Want to go deeper into practical strategies around death benefit payments? Read our Managing SMSF Death Benefits: Key Strategies article.

Proactive adviser checklist: Preventing Death Benefit Disputes

These steps can prevent the most common causes of conflict, delay, and litigation:

Validate BDBNs
Ensure nominations are correctly signed, witnessed, and meet fund deed requirements.

Educate the Client
Clarify that Wills do not override super, and that non-binding nominations give trustees discretion.

Review the Trust Deed
Especially in SMSFs – watch for hidden clauses or hardwired rules.

Document Client Intentions
Encourage clients to share their wishes with family and keep records in writing.

Check SIS Act Eligibility
Spouses, children, interdependents, and legal personal representatives are the only permitted recipients (unless directed to the estate).

Coordinate with the Estate Plan
Ensure nominations align with the Will, especially if benefits are paid to the LPR.

Track Expiry Dates
Create internal alerts for lapsing BDBNs and prompt renewals in advance.

Protect Client Intent and Your Advice Practice

Estate planning reviews are essential.

Recent court decisions highlight how easily a nomination can be ruled invalid, or how discretion can shift outcomes if a nomination is non-binding.

As an adviser, ensuring the death benefit strategy is valid, current, and aligned with the client’s wishes is one of the most important things you can do.

Whether you’re reviewing an SMSF trust deed, assessing nomination eligibility, or aligning super with the client’s broader estate plan, these reviews are your opportunity to lead with clarity, not just compliance.

At SMSF Engine, we support accountants and financial advisers with reliable SMSF administration, SMSF Property Valuation, accounting, actuarial, and audit support, so you can focus on client strategy while we take care of the technical execution.

If this is the kind of support you’re looking for, contact us, we’d be glad to discuss how we can work together.

Not sure what the process looks like? What to expect when working with SMSF Engine outlines how we collaborate with advisers to deliver seamless, behind-the-scenes SMSF support.

Be the adviser who sees around corners and helps clients protect their legacy on time.

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