In the context of a relationship breakdown between two spouses who are members of an SMSF, what are the options where the SMSF deed states that a member may give the trustee a death benefit nomination notice in the form approved by the trustee but there is no existing ‘approved form’?
Generally a review of the whole deed is required to confirm whether there are any other provisions outlining the process for specifying the ‘approved form’.
This said, generally where the wording ‘in a form approved by the trustee’ is used, our experience is that the form of the document is approved either on establishment of the fund, or (more often) at the time of preparing a BDBN.
The approval of the form by the trustee would be by either providing members with (say) a template issued to the trustee on establishment of the fund, the trustee resolving to approve a form and circulating that template or by resolving to approve a completed BDBN submitted by a member.
This means that even if a template form was created on establishment of the fund, this of itself will be unlikely to be sufficient to comply with the deed, unless the trustee took steps to formally approve it.
Where the members are spouses involved in finalising a property settlement, there may still be merit in producing and signing a BDBN now and submitting it to the trustee – in theory the interest of both spouses should be aligned about the ability to update all aspects of their respective estate plans (i.e. including a BDBN), despite their relationship breakdown.
Alternatively, steps could be taken to adopt a replacement deed which removes the wording around the BDBN needing to be in an approved form and simply requires the trustee to accept any BDBN provided by a member. This approach would still require the trustees to agree on updating the deed however.