Speaking in a recent webinar, Cooper Grace Ward Lawyers partner Clinton Jackson explained that while the Superannuation Industry (Supervision) Act (SIS Act) sets out who can be nominated as a beneficiary, there are deeds that are much more limited than what the SIS Act states.
“There are a number of deeds out there that for some reason do not draft [the limitations on beneficiaries] as widely as the SIS Act allows,” said Mr Jackson.
“For example, there are some deeds out there that only let you make a nomination in favour of dependants and not in favour of the LPR.”
Mr Jackson said SMSF professionals and their clients therefore need to read the deed and check what limitations there are.
“Make sure the person you are nominating falls within the eligible beneficiaries under your deed as well as the SIS Act,” he said.
“We still see clients who want to nominate their mother or their aunt or their cousins and all those sorts of things. We know that they fall outside of the SIS Act most of the time, but check your deed because sometimes deeds have some really unusual examples.”
Cooper Grace Ward Lawyers partner Scott Hay-Bartlem said it is also important to be aware that definition of spouse and child have evolved over the years.
“Some deeds are really narrow and really fixated, back in the early 2000s, spouses only included opposite sex couples. Interdependency relationships were only introduced in 2000 as a Democrat compromise for GST,” Mr Hay-Bartlem noted.
“So, if you’ve got an old deed, you may not pick up all these things and you may not realise until you blowtorch the deed.”
