How do SMSFs handle death benefits, and can a binding death benefit nomination be challenged?

On death of a member, the SMSF must pay out their benefits either to dependants (spouse, children) or the estate. A binding death benefit nomination (BDBN) directs the trustee to pay benefits according to the member’s wishes. While BDBNs are legally binding if valid, they may still be challenged in court (e.g., claims of undue influence or if the nomination wasn’t properly executed).