How do I make a valid Binding Death Benefit Nomination?

To make a valid BDN, you must: (1) complete the nomination in writing, typically using your super fund's specific BDN form; (2) nominate only eligible beneficiaries — dependants under the SIS Act or your legal personal representative; (3) specify the proportion each beneficiary receives (must total 100%); (4) sign and date the nomination; and (5) have it witnessed by two adults over 18 who are NOT nominated as beneficiaries. Requirements may vary slightly between funds, so always check with your fund.

Should I nominate my estate or a specific person in my BDN?

It depends on your circumstances. Nominating a specific dependant (like your spouse) is simpler and avoids the super going through probate. Nominating your legal personal representative (your estate) gives you more flexibility — you can distribute via your Will to anyone, including non-dependants, charities, and trusts. However, super that flows through your estate may be exposed to creditor claims and family provision claims. There are also tax implications: paying directly to a tax dependant is tax-free, but paying to the estate and then to a non-dependant may attract tax.

Binding Death Benefit Nominations Explained | BDN Guide Australia

Q: What is a Binding Death Benefit Nomination (BDN)?

A Binding Death Benefit Nomination (BDN) is a legal direction to your superannuation fund trustee that specifies exactly who must receive your super death benefit when you die. Unlike a non-binding nomination (which is just a suggestion), a valid BDN is legally binding — the trustee has no discretion and must pay the benefit to your nominated beneficiaries in the proportions you specify.

Q: What is the difference between a lapsing and non-lapsing BDN?

A lapsing BDN expires three years after it is signed and must be renewed to remain valid. If it lapses before you die, the trustee reverts to using their discretion. A non-lapsing BDN remains in force until you revoke or replace it — it never expires. Not all super funds offer non-lapsing BDNs; check with your fund. Self-managed super funds (SMSFs) can include non-lapsing BDN provisions in their trust deed.

Q: Can I change or revoke my BDN?

Yes, you can change or revoke your BDN at any time while you have legal capacity. To change it, complete a new BDN form — this automatically replaces the previous one. To revoke without replacing, complete a revocation form or written notice. The new nomination or revocation must meet the same validity requirements as the original BDN, including two adult witnesses.

Q: What happens if my BDN is invalid?

If your BDN is invalid (for example, it has lapsed, a nominee is no longer eligible, or the witnessing requirements were not met), the trustee is not bound by it. They will treat the benefit as if no BDN exists and exercise their discretion to decide who receives the benefit. This could result in your super going to someone you did not intend. Common reasons for invalidity include: lapsed nominations, incorrect witnessing, nominating a non-eligible person, or percentages not totalling 100%.

1. What Is a Binding Death Benefit Nomination?

A Binding Death Benefit Nomination — commonly called a BDN — is a legal direction you give to your superannuation fund trustee. It tells them exactly who must receive your super death benefit when you die, and in what proportions.

The word "binding" is crucial. Unlike a non-binding (or "preferred") nomination, which is merely a suggestion the trustee considers, a valid BDN is a legal instruction the trustee must follow. They have no discretion, no wiggle room, and no ability to override your wishes.

Without a BDN, your super fund trustee has full discretion to decide who receives your death benefit. They will consider your dependants, your circumstances, any non-binding nominations you have made, and their own assessment of what is appropriate. This discretionary process can take months, lead to family disputes, and produce outcomes that are very different from what you intended.

With a Valid BDN

Trustee must follow your instructions
You choose exactly who receives your super
You set the exact proportions
Faster payment (typically 4-8 weeks)
Reduces risk of family disputes
Enables tax planning strategies

Without a BDN

Trustee decides at their discretion
You have no guarantee who receives your super
Proportions decided by the trustee
Slower process (can take 6+ months)
Higher risk of disputes and challenges
Limited ability to plan for tax

Key Distinction

A BDN controls your super. A Will controls your estate. Super is not automatically part of your estate. You need both a BDN and a Will for a complete estate plan. Read our superannuation and estate planning guide for the full picture.

2. Lapsing vs Non-Lapsing BDNs

This is the distinction that catches most people off guard. There are two types of BDN, and they behave very differently over time.

Lapsing BDN

A lapsing BDN expires exactly three years from the date it was signed (not from the date the fund received it). After three years, it ceases to be binding. If you die after the expiry date, the trustee treats the nomination as if it does not exist and exercises their discretion.

The trap: You set up a BDN in 2023, feeling organised. Three years pass. You forget to renew it. In 2027, you pass away unexpectedly. Your BDN has lapsed. The trustee pays your death benefit at their discretion. Your carefully planned estate strategy falls apart. This happens far more often than people realise.

When lapsing BDNs make sense:

Your fund only offers lapsing BDNs (most industry and retail funds)
Your circumstances change frequently and you want a natural review point
You set a reliable reminder system to renew every three years

Non-Lapsing BDN

A non-lapsing BDN remains in force indefinitely — until you revoke it, replace it, or lose legal capacity. There is no three-year expiry. It continues to bind the trustee regardless of how much time has passed since you signed it.

The advantage: You set it up once and it stays valid for life. No risk of accidental lapsing. However, this also means you must be proactive about updating it if your circumstances change — there is no natural prompt to review it.

When non-lapsing BDNs make sense:

You want "set and forget" protection (but still review periodically)
You have an SMSF and can write it into your trust deed
Your fund offers non-lapsing BDNs (check directly — not all do)

Does Your Fund Offer Non-Lapsing BDNs?

Not all super funds are the same. The governing rules of your fund determine what types of nominations are available. Here is a general guide:

Fund Type	Lapsing BDN	Non-Lapsing BDN
Industry Funds (e.g., AustralianSuper, REST, HESTA)	Usually available	Check with fund
Retail Funds (e.g., AMP, Colonial First State)	Usually available	Check with fund
Corporate Funds	Usually available	Varies by employer
Self-Managed Super Funds (SMSFs)	Available	Available (if trust deed allows)

The simplest way to find out is to log in to your super fund's online portal and look for "death benefit nomination" or "beneficiary nomination" in the settings or forms section. If you cannot find the answer online, call your fund directly and ask: "Do you offer non-lapsing binding death benefit nominations?"

3. Who You Can Nominate

You cannot nominate just anyone in a BDN. The Superannuation Industry (Supervision) Act 1993 (the SIS Act) restricts who can receive super death benefits. Your nominated beneficiaries must fall into one of these categories at the time of your death:

Your Spouse

Includes your married spouse, de facto partner (of any gender), or registered partner. The relationship must exist at the date of your death. A separated-but-not-divorced spouse may still qualify depending on the circumstances.

Your Children

Children of any age — including biological, adopted, stepchildren, and children of your spouse. There is no age limit for nomination purposes, but there are significant tax implications for adult children who are not financially dependent.

Financial Dependants

Anyone who was financially dependent on you at the time of your death. This could include an elderly parent, a sibling, or any other person who relied on you for financial support. Partial financial dependence may be sufficient. The test is factual — was this person dependent on you?

Interdependency Relationship

A person with whom you had a close personal relationship, you lived together, and one or both of you provided the other with financial, domestic, and personal care support. A disability exception exists where the relationship meets all criteria except cohabitation.

Your Legal Personal Representative (LPR)

This is the executor of your Will (or the administrator of your estate). Nominating your LPR causes the super to flow into your estate, where it is distributed according to your Will. This is the only way to indirectly leave super to someone who is not a dependant — such as a friend, a charity, or a trust.

Critical: Eligibility Is Tested at Death

The person you nominate must qualify as a dependant or LPR at the time of your death, not at the time you make the nomination. If your circumstances change — for example, a divorce means your ex-spouse is no longer your "spouse" — the nomination for that person becomes invalid. This is why regular reviews are essential.

4. How to Make a Valid BDN

A BDN must meet specific legal requirements to be valid. If any requirement is not met, the nomination is invalid and the trustee is not bound by it. Pay close attention to these steps.

Get the Correct Form

Most super funds have a specific BDN form. Using a generic form or a letter may not be accepted. Log in to your fund's online portal, call them, or check their forms library. Look for "Binding Death Benefit Nomination Form" — not "Preferred Beneficiary" or "Non-Binding Nomination."

Complete the Nomination Details

Specify each beneficiary by their full legal name, date of birth, and relationship to you. Allocate a percentage to each beneficiary — the percentages must total exactly 100%. You can nominate one person for 100% or split it among multiple people.

Sign and Date the Form

You must personally sign and date the nomination. It cannot be signed by someone on your behalf (unless your fund's rules explicitly allow an attorney under a power of attorney to do so — and many funds do not).

Have It Witnessed Correctly

This is where most BDNs fail. The nomination must be witnessed by two adults aged 18 or over. Neither witness can be a person nominated as a beneficiary in the BDN. Both witnesses must sign and date the form, and typically must include a declaration that the form was signed in their presence.

Common error: Having your spouse witness a BDN where your spouse is also the nominated beneficiary. This makes the entire nomination invalid. Choose witnesses who are NOT beneficiaries — a work colleague, a neighbour, or a JP are good choices.

Submit to Your Fund

Send the completed, signed, and witnessed form to your super fund. Some funds accept electronic submissions; others require the original. Keep a copy for your records and store it securely — consider keeping a copy in your digital vault. Confirm with your fund that the BDN has been received and accepted.

Set a Renewal Reminder (Lapsing BDNs Only)

If your BDN is lapsing, set a calendar reminder for two years and nine months from now — giving you three months' buffer before expiry. When the reminder triggers, complete and submit a fresh BDN. Do not wait until the last minute. ezyWill can help you track your BDN expiry dates automatically.

5. When to Update Your BDN

A BDN is not a "set and forget" document — even a non-lapsing one. Your life changes, and your nominations should change with it. Here are the events that should trigger an immediate review:

Marriage or New De Facto Relationship

Your new spouse is now a dependant. Consider whether your nomination reflects your new family structure.

Divorce or Separation

Your former spouse may no longer qualify as a dependant. Failing to update is one of the most common and costly mistakes.

Birth or Adoption of a Child

New children should be considered as beneficiaries. You may want to adjust proportions across all children.

Death of a Nominee

If a nominated beneficiary dies before you, their portion may lapse. Update immediately to redirect their share.

Changing Super Funds

A BDN applies to a specific super fund. If you change funds or consolidate, you need a new BDN for the new fund. The old BDN does not transfer.

Establishing an SMSF

Moving to a self-managed super fund means you need a new BDN that complies with your SMSF trust deed. This is also an opportunity to implement a non-lapsing BDN.

Change in Financial Dependants

If someone you nominated was a financial dependant but is now independent (or vice versa), this affects their eligibility.

Updating Your Will

If you change your Will, check that your BDN still aligns with your overall estate plan. The two documents should work together, not contradict each other.

6. BDNs and Your Will

Your BDN and your Will are two separate legal instruments that must work together. Understanding how they interact is fundamental to effective estate planning.

Option A: Nominate Specific Dependants in Your BDN

You nominate your spouse, children, or other dependants directly. The super is paid straight to them — it never enters your estate and is not governed by your Will.

Advantages

Faster payment — no need to wait for probate
Not exposed to estate creditor claims
Not subject to family provision claims against the estate
Tax-free if paid to tax dependants

Disadvantages

Cannot leave super to non-dependants (charities, friends, trusts)
Less flexible — cannot be redirected via your Will
May cause unequal distribution if not coordinated with your Will

Option B: Nominate Your Legal Personal Representative

You nominate your LPR (your executor). The super flows into your estate and is distributed according to your Will.

Advantages

Maximum flexibility — your Will controls distribution
Can leave super to anyone, including non-dependants
Can use testamentary trusts for tax-effective distribution
Easier to coordinate with overall estate plan

Disadvantages

Super becomes an estate asset — may be subject to probate fees
Exposed to creditor claims against the estate
May be subject to family provision claims
Potentially taxable if distributed to non-dependants via the estate

Option C: A Blended Approach

Many financial advisors recommend a combination. For example, nominate your spouse for 75% (paid directly, tax-free, protected from creditors) and your LPR for 25% (flows into the estate for flexible distribution via your Will). This balances protection with flexibility.

Coordination Is Key

Whatever approach you choose, make sure your BDN and your Will tell a coherent story. If your BDN sends 100% of your super to your spouse, but your Will divides everything equally among your children, the children will receive less than you may have intended. Consider both documents as parts of a single estate plan. Our complete super estate planning guide explains this in detail.

7. BDNs for SMSF Members

If you have a self-managed super fund, you have more control over your death benefit nomination arrangements — but also more responsibility to get it right.

Trust Deed Is the Foundation

Your SMSF trust deed is the governing document that determines what types of nominations are available. Unlike industry or retail funds, you (or your advisor) can customise the trust deed to suit your needs. The trust deed must explicitly authorise binding death benefit nominations for them to be valid.

Non-Lapsing BDNs in SMSFs

One of the major advantages of an SMSF is the ability to include non-lapsing BDN provisions in the trust deed. This means your BDN never expires — it remains in force until you revoke or replace it. However, your trust deed must specifically allow this. If your trust deed only provides for lapsing BDNs, you will need to amend it.

Automatic Reversionary Pension Nominations

If you are drawing a pension from your SMSF, you can nominate a reversionary beneficiary. When you die, the pension automatically continues to the reversionary beneficiary (who must be a dependant). This provides continuity of income and can be more tax-effective than a lump sum payment.

Common SMSF Pitfalls

Outdated Trust Deeds

If your SMSF was established years ago, the trust deed may not include provisions for non-lapsing BDNs or other modern nomination options. Have your trust deed reviewed by a specialist.

Conflicting Nominations and Trust Deed

If your BDN contradicts your trust deed, the trust deed prevails. Ensure consistency between all documents — the trust deed, BDN, and your Will.

Sole Member SMSFs

If you are the sole member and sole director of your SMSF, there is a risk that no one can act on the fund if you die or lose capacity. Ensure you have a corporate trustee or a succession plan for the individual trustee role.

SMSF Checklist

✓ Review your trust deed for BDN provisions
✓ Consider amending the trust deed to allow non-lapsing BDNs
✓ Complete a BDN that complies with your trust deed
✓ Ensure your executor knows about the SMSF
✓ Consider a corporate trustee for succession planning
✓ Coordinate your BDN with your Will and Powers of Attorney

8. Tax Implications of BDN Choices

The person you nominate in your BDN directly affects how much tax is paid on your death benefit. This is not a minor consideration — for large super balances, the tax difference between different BDN strategies can be tens of thousands of dollars.

The Core Principle

Super death benefits paid to tax dependants are tax-free. Benefits paid to non-dependants are taxed on the taxable component at up to 15% plus Medicare levy (17% total for the taxed element, 32% for the untaxed element).

Importantly, the definition of "tax dependant" for death benefit tax purposes is different from the SIS Act definition of "dependant" for nomination purposes. For tax:

Tax dependant: Spouse, child under 18, person in an interdependency relationship, or person financially dependent on the deceased
Non-dependant (for tax): Adult children over 18 who are not financially dependent — the most common scenario that catches families off guard

Strategic Considerations

Strategy 1: Nominate Your Spouse Directly

If your spouse is alive and you want them to receive your super, nominating them directly in a BDN is the simplest and most tax-efficient approach. The entire benefit — both tax-free and taxable components — is received tax-free. It also avoids probate and protects the benefit from estate creditors.

Strategy 2: Nominate Your Estate for Will-Based Distribution

If you nominate your LPR, the super enters your estate. From there, distribution is governed by your Will. If your Will directs the super to tax dependants, it remains tax-free. If directed to non-dependants (like adult children), the taxable component will be taxed. However, this approach enables the use of testamentary trusts, which can provide income tax advantages for minor children and other beneficiaries.

Strategy 3: Split Between Spouse and Estate

A blended approach — for example, 70% to your spouse (tax-free) and 30% to your estate (for flexible Will-based distribution). This gives your family tax-free access to the bulk of the benefit while retaining some flexibility for estate-based planning.

For a detailed breakdown of tax rates, components, and worked examples, see our comprehensive Tax on Super Death Benefits guide.

9. Frequently Asked Questions

What is a Binding Death Benefit Nomination (BDN)?

A BDN is a legal direction to your super fund trustee specifying exactly who must receive your super death benefit when you die. Unlike a non-binding nomination, a valid BDN is legally binding — the trustee must pay the benefit to your nominated beneficiaries in the proportions you specify. It is the only way to guarantee where your super goes.

What is the difference between a lapsing and non-lapsing BDN?

A lapsing BDN expires three years after signing and must be renewed. If it lapses before you die, the trustee uses their discretion. A non-lapsing BDN remains in force until you revoke or replace it. Not all funds offer non-lapsing BDNs — check with your fund. SMSFs can include non-lapsing provisions in their trust deed.

How do I make a valid BDN?

Complete your fund's BDN form, nominate eligible beneficiaries (dependants or your legal personal representative), allocate percentages totalling 100%, sign and date the form, and have it witnessed by two adults over 18 who are NOT nominated as beneficiaries. Submit the completed form to your fund and confirm it has been accepted.

Can I change or revoke my BDN?

Yes, at any time while you have legal capacity. Complete a new BDN form to replace the previous one, or submit a revocation notice. The new nomination must meet the same validity requirements — including two adult witnesses who are not beneficiaries.

What happens if my BDN is invalid?

If your BDN is invalid, the trustee is not bound by it and will exercise discretion. Common reasons for invalidity include: the nomination has lapsed (expired after 3 years), witnessing requirements were not met (e.g., a beneficiary was a witness), a nominee is no longer eligible, or the percentages don't total 100%. Always confirm with your fund that your BDN has been accepted as valid.

Should I nominate my estate or a specific person?

Nominating a specific dependant (like your spouse) is simpler, faster, and protects the benefit from estate creditors. Nominating your estate gives flexibility to distribute via your Will — including to non-dependants. Many people use a blended approach. Consider tax implications: paying directly to a tax dependant is tax-free, while payments via the estate to non-dependants may attract tax. See our tax guide for details.