In a recent draft determination (2008/D1) the Australian Taxation Office gave its view on whether a SMSF trustee was obliged to follow a binding nomination in all circumstances.  The draft answer is no, because there is an over-riding principle that a fund cannot breach the operational standards of Superannuation Industry (Supervision) Regulations.

As an example, if a member nominates a spouse, then divorces, remarries and dies, must the payment go to the first spouse because no change of nomination occurred?

To do so would breach SIS regulations, which requires a dependency.  So the trustee is not required to follow the binding nomination.

It also seems that a binding nomination may not lapse after three years (the current perception by most commentators) when a deed provides a longer period e.g. five years.