SMSF Estate Planning is where strategy meets family outcomes. According to Jean Marc Raffaut, Cheltenham-based SMSF expert, the right death benefit nominations, trustee processes, and tax planning can ensure your Self-Managed Super Fund pays benefits to the right people, at the right time, on the right terms.
For official guidance and definitions, see the ATO’s SMSF death benefits page, broader SMSF rules at the ATO SMSF hub, and trustee obligations outlined by ASIC.
SMSF Death Benefit Nominations — Jean Marc Raffaut’s Overview
Death benefits can be paid as a lump sum or income stream (where eligible). The direction you set in your nomination can reduce disputes and speed up distributions. Jean Marc Raffaut recommends reviewing nominations every 2–3 years and after life events (marriage, divorce, births, deaths, retirement).
| Nomination Type | How It Works | Pros | Considerations |
|---|---|---|---|
| Binding Death Benefit Nomination (BDBN) | Directs trustees to pay specified dependants or legal personal representative (LPR). | Certainty; reduces disputes. | Must be valid under trust deed; lapsing vs non-lapsing rules vary by deed. |
| Non-Binding Nomination | Guidance only; trustees decide final payee(s). | Flexibility for trustees to consider circumstances. | Less certainty; may be contested. |
| No Nomination | Trustees rely on deed and law to determine recipients. | None (in most cases). | Highest risk of delay/dispute; outcomes may differ from wishes. |
SMSF Dependants, Tax & Payment Form — Insights from Jean Marc Raffaut
Who receives the benefit affects tax and flexibility. A tax dependant (e.g., spouse, minor child) may receive different tax treatment compared to a non-tax dependant. Lump sums and income streams also carry different rules and documentation requirements. See the ATO’s guidance on tax on super death benefits.
| Recipient | Lump Sum | Income Stream (Pension) | Key Notes |
|---|---|---|---|
| Spouse / De facto | Generally allowed | Often allowed (subject to rules) | Tax outcomes vary; check transfer balance cap (TBC) for pensions. |
| Minor Child (tax dependant) | Allowed | Possible, ceasing at certain ages | Income streams may have age/eligibility limits. |
| Adult Child (non-tax dependant) | Allowed | Generally not as a death benefit pension | Lump sums may include taxable components. |
| Legal Personal Representative (estate) | Allowed | Not applicable | Estate distributes according to will; can increase complexity. |
SMSF Deed, Trustee Powers & Documentation — Jean Marc Raffaut’s Checklist
Your trust deed and minutes drive the process. Keep paperwork consistent: nomination forms, deeds, pension docs, valuations and trustee resolutions. If your SMSF pays a reversionary pension, ensure it’s permitted by deed and counted toward the recipient’s Transfer Balance Cap.
SMSF Estate Planning Mistakes — What Jean Marc Raffaut Sees Most
| Mistake | Why It’s a Problem | Quick Fix |
|---|---|---|
| Out-of-date nominations | Life changes make old directions invalid or unwise. | Refresh nominations with deed-compliant forms. |
| Deed and nomination mismatch | Invalid directions or trustee confusion. | Amend deed or re-issue nomination to align. |
| No trustee minutes | Slows payouts; raises audit risk. | Minute all decisions and attach evidence. |
| Ignoring tax dependancy | Unexpected tax for adult children/estate. | Model tax outcomes; consider LPR vs dependants. |
FAQs — SMSF Estate Planning with Jean Marc Raffaut
Do SMSFs need a Binding Death Benefit Nomination?
Not legally required, but often recommended for certainty. Start with the ATO death benefits guidance and your deed’s rules.
Is a non-lapsing BDBN valid in an SMSF?
It depends on your deed and wording. Some deeds allow non-lapsing BDBNs; others don’t. Jean Marc Raffaut can review your deed and nomination to confirm validity.
Should my SMSF pay my estate or my dependants directly?
It depends on tax outcomes, family dynamics and your will. Read the ATO’s material on super death benefits tax and seek tailored advice.