SMSF Will vs BDBN After Hill v Zuda: Why Your Trust Deed Decides

Published 25 October 2026 · By Grant Abbott, Family Wealth Protection and SMSF strategist · 12-minute video + written guide

General information only. Not legal, tax or financial product advice, and it does not take into account your objectives, financial situation or needs. Get advice from a suitably qualified professional about your own circumstances.

The short answer

For a self-managed super fund (SMSF), the trust deed is where you start when you ask whether a binding death benefit nomination (BDBN) works. In Hill v Zuda Pty Ltd [2022] HCA 21, the High Court unanimously held that regulation 6.17A of the SIS Regulations, the rule behind the three-year, two-witness nomination, does not apply to SMSFs. The ATO's view is that, for an SMSF, the rules for a nomination (its form, how it is signed, whether it lapses) come from the fund's governing rules rather than from that regulation. In the ATO's view the operating standards still limit who can be paid (SMSFD 2008/3), and reg 6.22 still applies to an SMSF and limits who benefits can be cashed to (Hill v Zuda at [14] and [33]). In my view, and consistent with the ATO's guidance, a nomination that doesn't match what your deed requires doesn't bind the trustee. That is my view and the ATO's, not a holding of the High Court, which decided only that reg 6.17A does not apply to an SMSF.

Key takeaways

The deed is where you start. Hill v Zuda confirmed that the statutory BDBN formalities in reg 6.17A do not apply to an SMSF. The ATO's view, and the usual reading by practitioners, is that the fund's deed governs instead (SMSFD 2008/3). In my view, a nomination that doesn't match the deed doesn't bind.
Hill v Zuda did not kill BDBNs. The challenge to the nomination in that case failed because reg 6.17A does not apply to an SMSF. The Court did not decide whether the clause was otherwise valid or effective, and the case was not about SMSF Wills.
A lapsing, two-witness nomination is not automatically required for an SMSF, and, in the view of the Tax Institute and DBA Lawyers, a non-lapsing one is possible where the deed allows it (the High Court did not decide that point).
A Will does not by itself control your SMSF death benefit. The fund's rules, and any valid nomination, do.
"SMSF Will" is not a legal term with one fixed meaning. It describes various deed-based strategies, and the detail depends on the deed. Read yours.
I suggest you review every year, and whenever the family, the tax law or the deed changes.

Quick definitions (quote these)

Binding death benefit nomination (BDBN): a written direction from a super fund member to the trustee about who is to receive the member's death benefit. In the ATO's view, for an SMSF, whether it binds the trustee depends on the fund's governing rules (the trust deed) and the super law, not on SIS Regulation 6.17A.

SIS Regulation 6.17A: the rule that sets the form and the three-year life of binding nominations for funds whose rules allow a member to require the trustee to pay a death benefit to a dependant or the legal personal representative under section 59(1A) of the SIS Act. It does not apply to SMSFs (Hill v Zuda [2022] HCA 21 at [4]).

Hill v Zuda Pty Ltd [2022] HCA 21: a 15 June 2022 High Court decision. The Court held, in a joint judgment of seven judges, that reg 6.17A has no application to a self-managed super fund.

Trust deed (governing rules): the document that sets out how your fund works, including whether members can give binding directions about death benefits and what those directions must look like.

SMSF Will (as I use the term): a death benefit direction built into, and authorised by, the fund's trust deed. In my deeds, an SMSF Will is non-lapsing. It can deal with specific assets and with a death benefits trust. At this stage there are very few of these deeds. Other providers use the term differently, so there is no single standard definition.

Death benefits trust: a trust, set up under the fund's rules, that receives a member's death benefit for chosen beneficiaries instead of the benefit being paid to them in cash. "Death benefits trust" is not a legal term with one fixed meaning, and who can benefit depends on the super law and the deed.

What Hill v Zuda actually decided

Hill v Zuda Pty Ltd [2022] HCA 21 was decided on 15 June 2022. It was an appeal from the Court of Appeal of the Supreme Court of Western Australia ([2021] WASCA 59), which had itself dismissed an appeal from a Master's summary dismissal ([2020] WASC 89). Kiefel CJ, Gageler, Keane, Gordon, Edelman, Steward and Gleeson JJ gave joint reasons. The appeal was dismissed with costs.

The facts, in short. The fund was an SMSF. In December 2011 its deed was amended to insert a "binding death benefit nomination" clause. It required the trustee, if one of the two members died, to pay the whole of that member's balance to the surviving member. When the first member died, his daughter challenged it. It was not in dispute that the clause was a notice given by each member and that it did not meet the form and timing rules in reg 6.17A. So the sole substantive issue was whether reg 6.17A applied to an SMSF at all.

The holding. Reg 6.17A does not apply to an SMSF. The Court said: "Although the Court of Appeal ought to have reached the conclusion construing the regulation for itself, the Court of Appeal was correct to conclude that reg 6.17A has no application to an SMSF" (at [4]). The challenge to the clause was dismissed on the reg 6.17A ground, so the nomination clause was not struck down for failing reg 6.17A.

The reasons, in short. Regs 6.17A(2) and (3) were made for section 59(1A) of the SIS Act, and regs 6.17A(4) to (7) were also made for sections 31(1) and 32(1) (at [27]). Reg 6.17A(4) applies only if the fund's rules let a member require payment under reg 6.17A(2), and section 59(1A) "does not apply to an SMSF" (at [30]). The Court also said: "The two purposes of reg 6.17A – enabling members to compel trustees to distribute death benefits in accordance with their wishes and ensuring that members have sufficient information – are inapt to administration of an SMSF" (at [32]). It described an SMSF as "by definition, a superannuation fund in which members of the fund are also directors of the corporate trustee of the fund", and said that giving the notice "would be at best an exercise in formality and at worst redundant" (at [32]). Section 55A still operates for an SMSF through reg 6.17 read with regs 6.21 and 6.22 (at [14] and [33]). Read the full judgment for the Court's reasons.

What it did not say. It did not say every SMSF nomination is valid, that every deed allows a non-lapsing nomination, or that anything goes. The Court did not decide whether the clause was otherwise valid or effective under the fund's deed: the only issue was whether reg 6.17A applied. The case was not about SMSF Wills. The ATO's view is in SMSF Determination SMSFD 2008/3, issued on 17 December 2008 (a determination is the Commissioner's view and is not legally binding on the Commissioner). It says the governing rules of an SMSF "may permit members to make death benefit nominations that are binding on the trustee, whether or not in circumstances that accord with the rules in regulation 6.17A", but that a nomination is not binding "to the extent that it nominates a person who cannot receive a benefit" in accordance with the operating standards.

Why it matters. Many nomination forms and habits were built for funds other than SMSFs. In my view, copying those habits onto an SMSF is the wrong approach. The deed matters because, in my view and consistent with the ATO's guidance, a nomination that doesn't match it doesn't bind the trustee. The questions to ask are: what does this fund's deed say, does this nomination meet it, and does it name someone the super law allows to be paid?

Sources: High Court judgment (read the full judgment for the Court's reasons) on AustLII and the High Court of Australia; ATO SMSFD 2008/3; The Tax Institute case summary.

How an SMSF nomination goes wrong

Nominations usually fail on the paperwork, not on the case law. These are the patterns I see:

Wrong form. The deed wants a particular instrument or wording and the member used a generic retail-fund form.
Wrong signing. The deed asks for witnesses, trustee acceptance or notice, and a step was skipped. Does it need two independent witnesses, or will one do? That answer is in your deed, not in the legislation.
Wrong assumption on lapsing. Someone treated the nomination as expiring every three years (a rule for funds other than SMSFs), or assumed it never expires when the deed never said so.
Stale deed. The nomination was made under an old deed and a later amending deed changed the rules.
Ineligible recipient. The nomination names someone who cannot receive a death benefit under the super law.

SMSF Will vs BDBN: the comparison

	BDBN	SMSF Will (my deeds)	Ordinary Will
What it is	A direction to the trustee, authorised by the deed	A death benefit direction built into the deed's own rules	A direction about your personal estate
Where its power comes from	The deed (for an SMSF)	The deed	Succession law
Does it lapse?	For an SMSF, depends on the deed. (A nomination under reg 6.17A, in funds other than SMSFs, lapses after three years.)	Non-lapsing in my deeds	Not on its own, but life events can change its effect, so review it
Can it deal with specific assets (a house, crypto, gold)?	Depends on the deed	Yes, in my deeds	Yes, for assets in your estate
Can it direct how a benefit is paid (for example, as a pension)?	Yes, if the deed allows it (DBA Lawyers)	Depends on the deed	Not by itself
Death benefits trust under the fund?	Depends on the deed	Yes, in my deeds	A testamentary trust can sit under a Will, but that is a different tool
Court record	Tested in court a number of times (including Hill v Zuda)	I am not aware of any reported Australian decision on the validity of an SMSF Will (as at 25 October 2026)	Plenty of cases
Controls the SMSF death benefit by itself?	Yes, if valid under the deed and it names a person the super law allows to be paid	Yes, if valid under the deed and it names a person the super law allows to be paid	No. Not by itself

BDBN or SMSF Will? Many people use BDBNs, and they have been tested in court a number of times. An SMSF Will is my preference. Not everyone agrees. DBA Lawyers, a specialist SMSF law firm, prefers a BDBN. It says a well-drafted BDBN can also be non-lapsing and can direct how a benefit is paid, and that SMSF Wills are "subject to significant legal risk" with "no case law authority that we are aware of" on whether they are effective (DBA Lawyers, September 2021, before the High Court decision). I am not aware of a reported Australian court decision on whether an SMSF Will is valid, which cuts both ways: I know of none that has been upheld, and none that has been struck down. A well-drafted BDBN may be able to do some of the same things as an SMSF Will, so check what your deed actually provides. Neither one replaces reading your deed. Start with the deed.

A Will and a nomination do different jobs. Your Will deals with your personal estate. Super is held by the fund, so it does not automatically follow your Will. A valid nomination can pay a person directly, or it can direct the benefit to your legal personal representative, in which case it comes into your estate and your Will then applies. If there is no valid nomination, the trustee uses the discretion the deed gives it.

Funds other than SMSFs vs SMSFs

	Funds other than SMSFs (for example retail and industry funds)	SMSF after Hill v Zuda
Where the nomination rules come from	Section 59(1A) of the SIS Act and reg 6.17A	The trust deed (plus the super and trust law that always applies)
Three-year lapse	Part of the standard binding nomination under reg 6.17A	Only if your deed says so
Witnesses and form	As set by reg 6.17A and the fund	As set by your deed
Non-lapsing nomination	A binding nomination under reg 6.17A ceases to have effect after three years (or sooner if the fund's rules say so)	Possible if your deed allows it (the High Court did not decide this)
Who checks the paperwork	The fund	You, as trustee, and your adviser

Three checks for trustees and advisers

Here are three checks to talk through with your adviser, now and after any deed update or family change.

1. Read the deed, and every amending deed. A good deed should be easy to understand. Mine are written in plain English because, if it ever goes to court, a judge needs a simple explanation. Check that your nomination fits within what the deed says. If you can't produce the current rules, it is hard to show that the nomination is binding.

2. Check the execution requirements. All the paperwork in the world won't help if it wasn't signed properly. Look at how many witnesses the deed needs, whether the trustee must accept it, and whether it lapses. That information is found in the deed, not in a statute.

3. Review it every year. Tax law changes, strategies change, and families change. For example, the Government announced in the 12 May 2026 Budget a proposed 30% minimum tax on discretionary trusts from 1 July 2028. As at 25 October 2026 that measure is not yet law: two Bills (the Treasury Laws Amendment (Tax Reform No. 3) Bill 2026 and the Income Tax Rates Amendment (Minimum Tax on Discretionary Trusts) Bill 2026) were introduced on 14 October 2026. As proposed, the Bills exclude complying super funds and give a conditional exclusion for some testamentary trusts, and they are before a Senate committee that reports on 13 November 2026. My view is that a death benefits trust set up under an SMSF's deed is not caught by the proposed minimum tax. That view is not yet confirmed in the legislation. Get tax advice on your own trust.

Bonus: check the tax on the payout. A death benefit paid to an adult child who was not financially dependent on you is taxed as a payment to a "non-dependant". The taxed element of the taxable component is taxed at up to 15% (ITAA 1997 s 302-145(2)) plus the 2% Medicare levy, so up to 17%. On a $1 million taxed element, that is up to about $170,000. Any untaxed element (for example, part of some life insurance proceeds) is taxed at up to 30% plus the Medicare levy (s 302-145(3)). The tax-free component is not taxed (s 302-140). This is general information; the result depends on the facts. Who receives the payment, and whether they count as a tax "death benefits dependant", changes the result, which is why the structure matters.

Frequently asked questions

Does SIS Regulation 6.17A apply to SMSF binding death benefit nominations? No. In Hill v Zuda Pty Ltd [2022] HCA 21, the High Court unanimously held that reg 6.17A has no application to an SMSF. The regulation's three-year lapse rule and its witnessing formalities therefore don't automatically govern SMSF nominations.

Can an SMSF binding death benefit nomination be non-lapsing? It can be, if the fund's trust deed allows it and the nomination follows the deed. The High Court did not decide that point; it decided that reg 6.17A, with its three-year lapse, does not apply to an SMSF.

What did the High Court decide in Hill v Zuda? On 15 June 2022 the High Court dismissed an appeal and held that reg 6.17A does not apply to a self-managed super fund. The clause in that case, in the fund's deed, was not defeated for failing the reg 6.17A form and timing rules, because those rules do not apply to an SMSF. The Court did not decide any other question about the clause.

Is an SMSF Will the same as a BDBN? No. A BDBN is a nomination authorised by the deed. "SMSF Will" is a name for various deed-based strategies. In my deeds, an SMSF Will is non-lapsing, can direct specific assets and can send benefits into a death benefits trust. A well-drafted BDBN may be able to do some of the same things, so check what your deed actually provides. The term has no single legal definition, so the detail depends on your deed.

Do the BDBN rules for other funds apply to my SMSF? Not the reg 6.17A package. Those rules apply to funds other than SMSFs. Section 59(1) of the SIS Act does not apply to an SMSF, and reg 6.17A is tied to it. Your SMSF's nomination rules sit in its own deed, together with the operating standards that still apply.

What happens if my nomination doesn't match my trust deed? In my view, and consistent with the ATO's guidance, a nomination that doesn't match the deed doesn't bind the trustee. That is not a holding of the High Court in Hill v Zuda. The result then depends on your deed: the trustee may use its discretion or may follow another provision, and that is when family disputes and legal costs tend to start.

How often should I review my nomination? I suggest at least every year, and whenever your deed, the tax law, your family or your strategy changes. Marriage, divorce, the death of a nominee, a new dependant or a change in pension or contributions are all triggers.

Does my Will control who gets my SMSF death benefit? Not by itself. Your SMSF death benefit is paid under the fund's rules and any valid nomination. If a valid nomination directs the benefit to your legal personal representative, it then comes into your estate and your Will applies. It helps to make sure your Will and your SMSF documents work together.

Why does the choice between a BDBN and an SMSF Will matter? It affects how much control, flexibility and certainty your family gets, and how much tax may be paid. Both depend on the deed being sound. That is why I start with the deed.

Questions to take to your adviser

Do I have the current deed and every amending deed?
Does my nomination match the deed's nomination clause? Where does it not?
If the deed blocks what I want, should the deed be updated first, and then the nomination remade?
When will we review this again?

Reversionary deeds should be reviewed by a suitably qualified SMSF specialist or lawyer before use.

About the author

Grant Abbott is a Family Wealth Protection and SMSF strategist and the Chair of SAPEPAA. He helped establish the SMSF Association (as SPAA). He has worked in the SMSF field since 1994.

He is the author of Family Wealth Protection in Australia (2025) and The Guru's Guide to Self-Managed Super Funds (2017), and four earlier books.

Forthcoming (due 2027): Family Wealth Protection, SMSF and Tax Strategies for Medical Professionals and The Strategist's Guide to SMSFs.

Disclosure: SMSF trust deeds are available through LightYear Docs. Grant has a commercial interest in this topic.

About Grant · YouTube @GrantAbbott

Sources and further reading

SMSF Strategist Pty Ltd does not hold an Australian financial services licence and does not provide financial product advice. SMSF Strategist Pty Ltd, ABN 58 677 939 301, 3 Dunks Street, Parkside SA 5063.

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