A recent Federal Court case, Lynn v Australian Financial Complaints Authority [2025] FCA 175, has sent a clear message to SMSF members and advisers: if your succession planning isn’t watertight, your loved ones could be left with a legal mess—and a significantly reduced inheritance.
This case involved the estate of Richard Lynn, who passed away without a Binding Death Benefit Nomination (BDBN) or SMSF will in place. The absence of clear instructions during a period of relationship breakdown triggered a dispute over who should receive his super benefits. The Australian Financial Complaints Authority (AFCA) made a determination about the distribution of the death benefit, but this was challenged in court.
William Fettes, Director at DBA Lawyers, says the case is a reminder of how critical proper estate planning is—especially within an SMSF. It also shows how difficult it can be to challenge AFCA’s decisions, even in complex or disputed circumstances.
Key Facts of the Case
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Richard Lynn died in 2021, legally still married to his estranged spouse, despite years of separation and intervention orders.
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He had made a non-binding death benefit nomination (non-BDBN) in favour of his children in 2018.
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In 2019 he made a will leaving everything to his spouse, but in 2021 instructed lawyers to update the will in favour of his four daughters. That change was not finalised before he died.
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His SMSF trustee initially decided to pay the benefit to the estate, then reversed course and gave it all to his spouse.
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One of his daughters challenged the trustee’s decision via AFCA.
Outcome
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Super benefit value: $171,300
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AFCA ruled that this should be split 50/50:
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$85,650 to the estranged spouse
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$85,650 to be split among six children (approximately $14,275 each)
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Ms Lynn (the spouse) appealed to the Federal Court and lost.
Estimated Legal and Dispute Costs
The total legal costs and dispute-related expenses were likely between $60,000 and $130,000—a substantial erosion of the estate’s value. These costs were mostly borne by the estranged spouse and the daughter who filed the AFCA complaint, with possible additional costs deducted from the estate or SMSF for trustee-related legal advice.
In Other Words…
A failure to:
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finalise a new will,
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put in place a Binding Death Benefit Nomination or SMSF will,
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and properly document changes in relationship status
…resulted in tens of thousands in legal fees and a split benefit that may not reflect what Mr Lynn truly intended.
What You Should Do Now
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Make sure your BDBN — or better still an SMSF Will — is current and correctly signed. What’s the difference? Read on here.
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Review your trust deed to ensure it supports your succession intentions.
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Put clear documentation in place for who should control the fund if you lose capacity or die.
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Seek professional advice if anything in your life or SMSF has changed recently.
At Freedom Financial Solutions FFS, we help SMSF members ensure their wealth ends up in the right hands—without legal delays or disputes. If you’re not 100% sure your SMSF is protected, email mary-jane@freedomffs.com.au today.