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What is a Death Benefit Nomination (DBN)?
A Death Benefit Nomination is an important part of a Self Managed Superannuation Fund (SMSF) and Estate Planning.
Essentially a DBN states how the death benefits (funds of the deceased) in the Superannuation Fund will be directed - who will receive them.
A DBN can be either binding or non binding.
Section 59 of the Superannuation Industry Supervision Act 1993 (SISA 1993) states that the trustee of a Self Managed Superannuation Fund (SMSF) may be given notice by a member requiring it to provide benefits to a person or persons mentioned in the notice, being the legal personal representative or a dependant or dependants of the member.
Regulation 6.17A(2) of Superannuation Industry (Supervision) Regulations 1994 (SISR 1994) outlines the requirements to ensure that a member's death benefit notice is binding including:
1. Each death benefit nominee is a legal personal representative or dependent of the member;
2. The allocation of the benefit is clear;
3. Notice is in writing and is signed and dated by the member in the presence of two witnesses aged over 18;
4. The notice ceases to have effect 3 years from the day it was first signed.