When an SMSF member dies, the SMSF generally pays a death benefit to a dependant or other beneficiary of the deceased. This should be done as soon as possible after the member's death.
If the recipient is a dependant of the deceased, the death benefit can be paid as a lump sum or income stream. The income stream can be new or a continuation of an existing income stream.
If the recipient is not a dependant of the deceased, the death benefit must be paid as a lump sum.
A valid binding death benefit nomination (lapsing) remains in effect for three years from the date it is first signed, last amended or confirmed. A valid binding death nomination (non-lapsing) will not expire unless you amend or revoke it. A binding death nomination does not effect until it has been received and accepted by the Trustee.