Home   >   Publications   >   Estate Planning: Superannuation and Wills equals Confusion

Estate Planning: Superannuation and Wills equals Confusion

Legal Meetings, Minimise risk in litigation
Author:

Gone are the days when most people simply had a home, a bank account and possibly a few shares, and could confidently go to their neighbourhood lawyer and ask for a simple Will to be prepared.  The introduction of capital gains tax 30 years ago, the increasing importance and complexity of superannuation and the increasing complexity of family and personal situations have made this simplistic approach outdated and very unwise.

Just one example is the complexity of the superannuation rules which apply when a person dies. Combine this with the myriad factors which a Will must now take into account, and confusion is the natural result. Today, the advice of an experienced estate planning lawyer is essential.

Superannuation is one of the most valuable assets that we own.. Yet, we find that there is a lot of confusion around it! Superannuation is a somewhat unique financial creature, with its own particular rules and regulations.   In a sense it has a life of its own.  Without careful steps being taken, superannuation cannot be controlled by your Will and may end up passing to somebody you did not intend to benefit from it if you die.

Your basic choices for the disposal of your superannuation on your death are:

  • Leave the discretion as to who should benefit to the trustees of the superannuation fund (who may be a financial institution, trustees of an industry superfund, or your family controlling your self managed superannuation fund after your death);
  • Make a binding death benefit nomination, which compels the trustee of the fund to either pay the benefit to a qualifying person nominated by you, or to your estate (so that your will can direct who receives it).

Some particular points of confusion which arise are:

  • Confusion between a binding and a non binding nomination.  Only a binding nomination compels the trustee to pay according to your wishes.   A non binding nomination simply gives a trustee an indication of what your preference is, but the trustee still must make its own decision.
  • Confusion about how to word a binding death benefit nomination.

A recent Queensland Supreme Court case has highlighted how tricky this can be.  A superannuation member with legal training intended that the death benefit be paid to his estate, but used wording which did not technically comply with what the superannuation trust deed required in order to nominate an estate.  The Court held that the nomination was invalid. 

The effect of this was that his wife of a second marriage was able to receive the whole of the superannuation death benefit, whereas if the nomination had been correctly worded it would have gone into his estate and his will would have passed to the children of his first marriage.

All of the above highlights how important it is to obtain experienced, professional advice from an estate planning lawyer about all aspects of planning for contingencies such as death and incapacity.

Contact a member of our Estate Planning Team if you require any assistance or would like to book a time for a Will Review.

Peace of Mind is not overrated!

 


Subscribe to our newsletter

eBooks

A-Guide-to-Estate-Planning-Booklet

DOWNLOAD eBOOK

First Name
Surname
Email

captcha

×
Dividing Up Your Property on Separation Booklet

DOWNLOAD eBOOK

First Name
Surname
Email

captcha

×
Spouse maintenance booklet

DOWNLOAD eBOOK

First Name
Surname
Email

captcha

×
Going to Court in a Family Law matter

DOWNLOAD eBOOK

First Name
Surname
Email

captcha

×
I am buying a pharmacy - what do I need to know first

DOWNLOAD eBOOK

First Name
Surname
Email

captcha

×
I want to sell my pharmacy

DOWNLOAD eBOOK

First Name
Surname
Email

captcha

×

TESTIMONIAL

  • Dear Pat, Lisa & Alexia,

    We wish to thank you for all your assistance during what has been a very difficult time for us. It is that time of the year that we remember everyone that has helped us get through it.

    Our very best wishes to you.

     

     

    Anon.
  • “The team at CLW has been Volvo Group’s lawyers for many years. They advise on all aspects of our business including Dealer Agreements, supplier agreements, tenders, litigation and property transactions. Their advice consistently highlights their intrinsic understanding of our business issues and their lawyers are always available to meet the needs of the business. CLW is an integral part of our operation”

    Ajit Singh, Director
  • We have no hesitation in endorsing Clayton’s Family Law team.

    Outcomes for our clients have been excellent and the sensitive and mature way in which the firm has assisted us to resolve issues has been a feature of the relationship.

    Where small businesses involve two spouses working together re-configuring businesses after a marital breakdown can be extremely difficult. The team at CLW have the expertise and energy to work with industry experts like ourselves to achieve sensible and workable outcomes.

    John S.
  • “Your management of our ‘case’ was flawless. Your communication was impeccable. You were efficient. And you were caring. You were the shining light in this dark period.

    The CLW organisation is stronger for the input of Eddie & Lisa. You are exceptional individuals and a formidable team.

    I thank you, and wish you every success in the future.”

    Josh A.
  • Hi Sheree,

    I just wanted to say a big Thank You for your kindness and diligence in my recent divorce case. Always making yourself available and answering my millions of questions was amazing!

    Sandy J.