Cleardocs enables you to create, replace or confirm death benefit nominations for members of self-managed superannuation funds. (For any SMSF's set up through Cleardocs, you receive Death Benefit Nominations with the original package of documents you create. The nominations are part of the member's application form to join the fund.)

Information only

Below, we set out some considerations in relation to death benefit nominations. However, before you decide to do anything in relation to a nomination, you should get legal, financial or other advice. We cannot give you that advice. As we do not know the fund's or the member's situation, you need to remember that the summary below is for information purposes only.

The new product may be useful:

• for any old funds for which the members have not completed death benefit nominations; and
• for any funds for which existing nominations may be either out of date or expired. Remember, the law says that after 3 years, a binding death benefit nomination expires if it is not confirmed. After it expires, the other trustees (or other directors of the trustee company) are free to distribute the relevant money any way they like (that is allowed under the fund's deed and superannuation law) - potentially, even to themselves.

As always, the Cleardocs documents are signed-off by our lawyers at Maddocks.

FREE marketing letter

To help you explain to your clients the need for them to consider creating, replacing or confirming the members' death benefit nominations, you can use the Cleardocs draft marketing letter available here . The summary in that draft letter is for information purposes only. We are not allowed to give advice. Also, because we do not know the member's or the fund's situation, we can give only information, not advice.

What is included in the Cleardocs package?

The Cleardocs package provides the forms you need to create, replace or confirm the members' death benefit nomination.

The Cleardocs interface lets you set, on a member-by-member-basis, whether a member's nomination is to be binding or non-binding.

Why are Death Benefit Nominations useful?

A member of a Self-Managed Superannuation Fund can use a Death Benefit Nomination form to nominate who is to receive any amount payable under the fund when the member dies. (The nomination can be binding or non-binding - see below.) On the form, the member tells the other trustees (or the other directors) who the member wants them to pay the money to and in what proportions. If there is no nomination form, then normally the other trustees (or other directors) can distribute the relevant money at their complete discretion (in any way that that is allowed under the fund's deed and superannuation law) - potentially, even to themselves.

Are Death Benefit Nominations binding?

The law, and the Cleardocs SMSF Deed, allow a member to set whether their Death Benefit Nomination is to bind the other trustees (or the other directors) or merely to guide them. (You can use Cleardocs to update an existing fund's deed to a Cleardocs Deed for $99, inc GST.)

If a member's Death Benefit Nomination:

• is binding, then the trustees (or the other directors) must arrange for the relevant amounts to be paid exactly as the member directed. However, the law says that a binding Death Benefit Nomination lasts for only 3 years. So a member needs to consider whether to make a new binding nomination, or to confirm the existing binding nomination, within 3 years after the date of the existing nomination (and whether to keep it up to date).
• is non-binding, then the trustees (or the other directors) still have a discretion as to how the relevant amounts are to be paid. That is, they are not bound to follow the member's wishes.

Some people use a binding Death Benefit Nomination in situations where the member thinks that the other trustees (or other directors) might distribute the money in a manner that is not consistent with the member's wishes. In some families, this is a likely scenario. They need to consider keeping the binding Death Benefit Nomination up to date because it lasts for only 3 years from the date it was signed or last confirmed.

How often should members consider creating, replacing or renewing their nominations?

Creating: Members should consider making a new nomination whenever their situation, or their dependant's situation, changes in a way that affects how the member would like their superannuation benefit to be distributed after they die. The member should consider this whether the member's nomination is binding or non-binding.

Replacing or confirming: Members with binding nominations that still reflect the member's wishes should consider confirming their nominations at least every 3 years - this is because the law says that 3 years after a binding nomination is signed or confirmed, it expires. When the nomination expires, the other trustees (or other directors) can then distribute the amount payable on the member's death without regard to the member's wishes. That is, they are no longer bound by the member's expired nomination. In some cases, they may be able to pay the money to themselves.

How much does it cost to update or renew a nomination?

The Cleardocs fee for producing the forms to create, replace, or confirm the death benefit nominations for any, or all, of the members of a fund is $49.50 (inc GST). The fee is the same for one or more members - provided the forms are ordered at the same time.

Questions or further information

If you have questions:

• about how to use Cleardocs, contact the Cleardocs helpline on 1300 307 343.


• about legal issues, contact the Cleardocs helpline on 1300 307 343. If you need advice, we will arrange for you to speak with a lawyer at Maddocks. The firm provides a free legal helpline in relation to the documents Cleardocs provides. If you require other legal advice in relation to your particular circumstances, then this will be charged for.