Death benefits not reliant on probate
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In particular, Accurium technical superannuation adviser Jason Hurst noted the trustees of an SMSF where a member has passed away do not need to wait for probate before death benefits from the fund are paid out.
“Nothing in super law requires for a death benefit to be dealt with by the fund. [The Superannuation Industry (Supervision) Act and Regulations do not] say that we need to wait for probate,” Hurst told attendees of the most recent Accurium technical webinar held last week.
“A [superannuation] death benefit generally isn’t an estate asset, so if the [SMSF] trustees are able to make that payment and they have all of the documentation [allowing them to make that payment] quicker than probate, it is certainly possible.”
However, he pointed out the fund’s trust deed needs to be reviewed before deciding to take this course of action.
“Again it all comes back to what the deed says. It seems that some retail super fund deeds require probate [before a death benefit can be paid] maybe if the death benefit is over a certain amount. Whether that could apply in an SMSF deed [is a possibility],” he said.
He warned a situation where the SMSF member who passed away is the sole member of the fund, other restrictions regarding a death benefit payment may also need consideration.
“[In this situation] we’ve got no one who can make decisions until we’re able to appoint [a replacement trustee]. So then [we need to determine if] the SMSF deed has a particular definition of an LPR (legal personal representative). Does it just say they need to be an executor of [the deceased member’s] will or does it say they need to be the executor of the will and [need to] receive probate to act?” he said.
“So under super law we don’t need to wait for probate, but there may be some other reasons why we [may need to do so].”
July 29, 2025
Darin Tyson-Chan
smsmagazine.com.au