Family Court orders member to revoke BDBN

A Family Court has ordered a husband to revoke any existing BDBN which he had made and has restrained him from making any BDBN which would have the effect of rendering a payment made pursuant to the nomination being an unsplittable payment.

Normally, the death of a member does not defeat the operation of a payment split interest which is in force before the date of death – as any payment of the death benefit is a splittable payment.   However, certain payments are expressly excluded as being splittable payments and, therefore, could by-pass the effect of payment split interest.

One type of payment which could by-pass a payment split interest is a death benefit paid to a child under age 18 (as at the date of payment) where the payment is made pursuant to a BDBN.  This is the reason for the wife seeking the orders in relation to the BDBN – possibly due to an abundance of caution or because there was a considerable period between the payment split interest coming into force and the retirement of the husband.  The case is Kerby v Kerby [2014] FamCA 857.