Superannuation is a common asset in Australia and is often the largest asset someone has when they die.  Remember that if you die before retirement age and you have a standard retail fund your superannuation benefit will include a life insurance pay out that is often the quite valuable, usually a couple of hundred thousand dollars depending on your age at death and the type of fund.

The ‘Death Benefit’ payable from your superannuation policy is generally not covered by your Will.

 

In most cases the death benefit is payable in accordance with specific written instruction you give to your Super Fund (called a “Binding Nomination”). If you fail to give such an instruction the Trustee of your Super Fund can pay out to whoever they think it should be paid.

The binding death nomination has to be valid in order to be effective in forcing the Trustee of the Super Fund to do what you want them to do. Even perfectly valid nominations expire after three (3) years and have to be renewed every three (3) years.  

It doesn't matter if the superannuation company tells you that it is permanent or life long, because even if the Trustees of the Superannuation company believe that the Superannuation Complaints Tribunal has the right by legislation to overrule your superannuation trustees and your binding death benefit nomination if it was more than three years old at the time of your death.  What that means is if somebody challenges the payment made by the superannuation company the Tribunal can make their own decision about who deserves the money and you are not there to defend the decision.  

 

 

 

We have seen matters were boyfriends or girlfriends who haven't been with the deceased for very long claim to be de factos, and claim to have kept the relationship secret from the children and the family because they wouldn't approve.  We have seen matters where another family member challenges the inheritance of the spouse on the basis that they were financially dependant upon the deceased at the time of death and (conveniently) the deceased person only ever gave them money in cash so that the spouse didn't know about it because they wouldn't approve.  

 

You will not be alive to negate these allegations, and your family may be unable to provide definitive evidence to defeat the claim.  What you can do to stop these sorts of claims is sign a binding death benefit nomination.

The form used and the way the form is signed or witnessed has to be strictly in accordance with the requirements of your superannuation fund’s rules otherwise the nomination will not be valid.

If someone was able to succeed in having a Court declare your binding death nomination invalid, then they can ask the Super Fund Trustee to pay the death benefit to them, and the Trustee has the power to decide who the money will be paid to.

 

What do I do next?

If you need to update your Will, or if you are unsure if you need to update your Will, then you should make an appointment to see Bruce Coode.  He has been assisting clients with their Estate Planning needs for four decades and will help you to make sure that you have ticked all the boxes.

Your initial half hour appointment is free so if it turns out that your Will is up to date and you have no other Estate planning needs then you have only lost a bit of your time. Don't risk someone else inheriting your Estate, make an appointment to speak with Bruce so that you know your family is provided for.

 

 

More information

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