SMSF Will vs BDBN After Hill v Zuda

Is your SMSF binding nomination worthless if the deed is wrong?

Yes — it can be. If your SMSF binding death benefit nomination (BDBN) does not match what your fund’s trust deed (governing rules) allow, it can fail even when you believe you “did a binding nomination.” In Hill v Zuda Pty Ltd [2022] HCA 21 (15 June 2022), the High Court unanimously held that SIS Regulation 6.17A does not apply to SMSFs. That means the regulation’s three-year lapse rule and prescribed formalities do not automatically govern SMSF BDBNs. For SMSFs, validity, duration (including non-lapsing) and form turn on the deed — plus general superannuation and trust law. Retail and other APRA-regulated funds still operate under 6.17A. Punchline: the deed is king.

In short: stop copying retail-fund nomination habits onto SMSF clients; pull the current deed; match the nomination to that deed; and revisit after life or strategy change. A Will does not, by itself, bind the SMSF trustee on death benefits.

Definitions: BDBN, Hill v Zuda, and why the deed is king

BDBN (SMSF context): A binding death benefit nomination is a direction to the SMSF trustee, authorised by the fund’s governing rules, as to how a member’s death benefits are to be paid; for SMSFs its validity and duration turn on the deed, not on SIS Reg 6.17A.

Hill v Zuda holding: In Hill v Zuda Pty Ltd [2022] HCA 21, the High Court unanimously held that SIS
Regulation 6.17A does not apply to SMSFs; therefore the regulation’s three-year lapse rule and prescribed formalities do not automatically govern SMSF BDBNs.

Deed is king: For SMSF binding nominations, the trust deed / governing rules determine what form is required, whether a nomination can be non-lapsing, and whether a given nomination is valid.

APRA vs SMSF split: Retail and other APRA-regulated funds still operate under the SIS Reg 6.17A framework; SMSFs do not — advisers must not copy-paste APRA fund nomination habits onto SMSF clients.

Will ≠ SMSF death benefit control: A member’s Will does not, by itself, bind the SMSF trustee on death benefits; the deed and any valid nomination (or trustee discretion under the deed) do.

Practical takeaway: treat “binding” as a claim that must be proven against this fund’s governing rules —not against a retail-fund checklist you used last week.

What Hill v Zuda actually held (plain English)

Hill v Zuda Pty Ltd [2022] HCA 21 was decided by the High Court of Australia on 15 June 2022. The Court was unanimous.

What the Court held, in plain terms:

SIS Regulation 6.17A does not apply to SMSFs.
Therefore the features people often associate with “a proper BDBN” under 6.17A — including the three year lapse rule and the regulation’s prescribed formalities (commonly discussed as including two witness requirements) — do not automatically apply to SMSF binding nominations.
For an SMSF, questions of validity, duration (including whether a nomination can be non-lapsing), and form are governed by the SMSF trust deed / governing rules, read with general superannuation and trust law.
APRA-regulated / retail funds continue to live under the 6.17A framework. SMSFs do not. Different product, different rulebook.

What this page does not do: invent contested facts from the litigation, quote invented judgment passages, or tell you that every SMSF deed already allows non-lapsing nominations. Some deeds do. Some do not. Your deed decides.

Why advisers still mis-speak after 2022: retail and industry processes trained many professionals to treat 6.17A as “the BDBN rules.” After Hill v Zuda, that shortcut is unsafe for SMSF work.

Why nominations fail when the deed mismatches

A tidy file can still fail when tested. Common mismatch patterns (illustrative, not exhaustive):

Wrong form. The deed requires a particular nomination instrument, schedule, or wording; the member used a generic retail-style form.
Wrong process. The deed requires trustee acknowledgement, specific execution steps, or member notices that were skipped.
Assumed three-year rule. The adviser treated the SMSF nomination as expiring every three years under 6.17A — or, conversely, assumed it was non-lapsing when the deed never authorised that.
Who can be nominated. The deed or SIS death-benefit dependant rules constrain recipients; the nomination names someone the regime does not permit in that way.
Stale deed. The nomination was made under (or by reference to) an older deed; amending deeds changed the nomination regime and nobody re-papered the nomination.
Copied APRA habits. Two witnesses, three-year refresh, and retail wording were treated as universal law rather than APRA-fund practice.

Grant’s working image: a BDBN with a weak or mismatched deed is like a paper bag once contested — the label says “binding,” but the structure does not hold.

When the deed itself is the problem — outdated nomination clauses, no clear non-lapsing pathway, or forms that never matched the strategy — the document pack matters. Fix the governing rules first; then remake the nomination so the two align. Your lawyer or specialist SMSF adviser should run that review against your actual deed.

SMSF Will vs BDBN — clarify the marketing shorthand

Market language often treats “SMSF Will” as a fancy BDBN. Treat that carefully.

Ordinary Will

What it usually means in practice: Directs estate assets under succession law
What it is not: Does not, by itself, bind the SMSF trustee on death benefits

BDBN

What it usually means in practice: A nomination / direction authorised by the fund’s governing rules
What it is not: Not automatically “binding forever” unless the deed supports that; not the same as a Will

“SMSF Will” (market shorthand)

What it usually means in practice: Often used for deed-embedded or governing-rules strategies that go beyond a simple percentage nomination — e.g. more detailed death-benefit directions within the fund’s rules
What it is not: Not a substitute for reading your deed; not a magic label that overrides SIS or trust law

Two different tools, two different jobs:

The Will deals with estate property and estate administration. Super death benefits are generally paid under the fund’s rules — they do not automatically “follow the Will.”
The BDBN (where the deed allows it) is a fund-level direction to the trustee. Its strength is only as good as the deed authority underneath it.
Strategies marketed as an SMSF Will typically sit in the governing rules conversation: more
structured directions, sometimes including trust or pension pathways on death. Whether your fund can support that depends on how the deed is drafted and updated — not on the slogan on a brochure.

Related: SMSF Will vs BDBN and testamentary trust + SMSF. Those expand sequencing; this page owns the Hill v Zuda / deed-is-king wedge.

APRA fund BDBN habits vs SMSF reality

Key rule source

APRA / retail fund habits: SIS Reg 6.17A framework still applies
SMSF after Hill v Zuda: Deed / governing rules (+ general super/trust law); 6.17A does not apply

Three-year lapse

APRA / retail fund habits: Often part of the 6.17A picture
SMSF after Hill v Zuda: Not automatic — only if your deed says so (or other applicable law requires it)

Formalities / witnesses

APRA / retail fund habits: Follow the 6.17A / fund process
SMSF after Hill v Zuda: Follow what the deed requires — do not assume retail formalities are enough or always necessary

Non-lapsing nominations

APRA / retail fund habits: Constrained by the retail/APRA regime
SMSF after Hill v Zuda: Possible only if the deed allows; Hill v Zuda did not invent a universal non-lapsing right

Copy-paste risk

APRA / retail fund habits: Industry process muscle memory
SMSF after Hill v Zuda: High — advisers who paste APRA habits onto SMSFs create mismatch risk

Who “owns” validity

APRA / retail fund habits: Fund product rules + statute/reg
SMSF after Hill v Zuda: Primarily your trust deed — pull it before you certify “binding”

Three checks for trustees and advisers

Run these before you sleep on a file — and again after any deed update or life event.

Pull the current deed — and every amending deed
Ask for the consolidated governing rules or the original deed plus every amendment. Nominations fail on phantom deeds: people quote a 2012 schedule while a 2019 amending deed rewrote the nomination clause.
If you cannot produce the current rules, you cannot honestly call the nomination binding.
Match the nomination form and process to that deed
Read the nomination clause like a checklist: Who may nominate? What form? Witnesses or not? Trustee consent? Can it be non-lapsing? Who may receive? Then check the signed nomination against that checklist
— word for word. If the form came from a retail kit or a software default, verify it against this deed, not last year’s template library.
Revisit on life, deed, or strategy change
Trigger a review on marriage, divorce, death of a nominee, birth of a dependant, blended-family change, major contribution or pension start, deed update, or a shift in estate strategy (e.g. death benefits trust, reversionary pension, or estate vs non-estate pathways). A nomination that matched the deed in 2018 can be orphaned by a 2024 amending deed nobody re-papered against.

Adviser workflow tip: diary an annual “deed vs nomination” pull the same way you diary contribution
caps. The risk is often administrative drift.

Frequently asked questions

Does SIS Regulation 6.17A apply to SMSF binding death benefit nominations after Hill v Zuda?
No. In Hill v Zuda Pty Ltd [2022] HCA 21, the High Court unanimously held that SIS Regulation 6.17A does not apply to SMSFs. The regulation’s three-year lapse rule and prescribed formalities therefore do not automatically govern SMSF BDBNs.
Can an SMSF BDBN be non-lapsing?
Only if your SMSF trust deed / governing rules allow it (and the nomination is valid under those rules and general law). Hill v Zuda removed the automatic 6.17A three-year frame for SMSFs; it did not grant every fund a non-lapsing nomination by magic. Read the deed.
What did the High Court decide in Hill v Zuda Pty Ltd [2022] HCA 21?
On 15 June 2022 the High Court unanimously held that SIS Regulation 6.17A does not apply to SMSFs. Validity, duration (including non-lapsing), and form of SMSF binding nominations are governed by the fund’s trust deed / governing rules, together with general superannuation and trust law. APRA/retail funds remain under the 6.17A framework.
Is an SMSF Will the same as a binding death benefit nomination?
No. A BDBN is a nomination/direction authorised by the fund’s governing rules. “SMSF Will” is often marketing shorthand for deed-embedded or governing-rules strategies that can go beyond a simple BDBN. Neither replaces a careful deed review, and neither is the same as an ordinary estate Will.
Do retail / APRA fund BDBN rules apply to SMSFs?
Not the 6.17A package. Retail and other APRA-regulated funds still operate under SIS Reg 6.17A. SMSFs do not. Advisers must not copy-paste APRA fund nomination habits onto SMSF clients.
What happens if my BDBN doesn’t match my SMSF trust deed?
It can fail — the nomination may be invalid or not binding as intended, leaving payment to trustee discretion under the deed (and exposing families to dispute). Mismatch on form, process, duration, or permitted nominees are classic failure points. Fix alignment before death tests the file.
How often should SMSF trustees review their binding nominations?
At least when the deed changes, and on major life or strategy events (marriage, divorce, death of a nominee, pension or contribution shifts). Many practices also run an annual deed-vs-nomination check. After Hill v Zuda, “we refreshed every three years because 6.17A” is not a sufficient SMSF answer by itself.
Does my Will control who gets my SMSF death benefits?
No — not by itself. A member’s Will does not bind the SMSF trustee on death benefits. Payment follows the deed and any valid nomination (or trustee discretion under the deed), subject to superannuation and trust law. Coordinate Will and SMSF strategy; do not assume one document does the other’s job.

What to do next

If you are a trustee or adviser and you have not pulled the deed against the nomination this year — do it
this week.

Gather the current deed and 1. amending deeds.
Lay the nomination beside the nomination clause.
Note every mismatch; remake the nomination (and update the deed if the rules block the strategy).
Diary the next review trigger.

Book a strategy conversation at grantabbott.com — bring the real deed and nomination.

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Education only — not legal advice. This material is general information for Australian accountants, advisers, SMSF trustees and business owners. It does not consider your objectives, financial situation or needs and is not a substitute for advice on your SMSF trust deed, nominations, Will or estate plan. In Hill v Zuda Pty Ltd [2022] HCA 21 the High Court held that SIS Regulation 6.17A does not apply to SMSFs; always verify how your deed treats binding nominations with your qualified adviser. Case citations are for education; no fabricated judgment quotes are intended. © Grant Abbott · grantabbott.com