Article of Interest on Wills & Estates

BINDING DEATH BENEFIT NOMINATIONS

Your Will does not control the death benefit on your superannuation policy. You can control who receives the death benefit by making a Binding Death Benefit Nomination. It must be done formally and in accordance with the rules.

Most superannuation funds allow you to make binding nominations. If you are a member of a self-managed superannuation fund you need to know;-Who controls the fund now, who will control the fund after your death, who could control the fund, could the death benefit end up in the wrong hands?

Peter and Patricia had lived together, although not formally married, for 10 years. Peter had one son Ronald to a former marriage. Peter had a self-managed super fund with $2 million in it-.set up by his Accountant. Peter had not had the fund explained to him carefully nor was he really interested.

The trustee or controller of the fund was a company known as Peter Pty Ltd. Peter and his son Ronald were the shareholders in that company. Peter intended Patricia to receive the death benefit from the super fund on his death. He was not aware he could have filled out a binding nomination form that would do this.

Peter died. Ronald, as surviving shareholder in the trustee company, now controlled the super fund. Ronald was eligible under the rules to receive the death benefit- so he simply paid the whole of the death benefit to himself. He never much liked Patricia anyway.

Patricia sought help, but the advice she received was that Ronald had acted lawfully, if not indecently.

When you are receiving estate planning advice, and drafting your Will, make sure you don’t forget your superannuation death benefit. An experienced Estate Planning Lawyer will not allow you to forget it.

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