All working Australians accumulate superannuation throughout their careers in preparation for retirement. But should you pass away before accessing all of the money, a dispute may arise as to who is eligible to receive your superannuation and your estate may not be administered as you had intended.
In a recent case, the superannuation balance of Ms Ashleigh Petrie was awarded not to her mother (who she had nominated as her beneficiary to her superannuation fund); but rather her de facto partner, Mr Rodney Higgins. This was controversial as although the couple were engaged at the time of Ms Petrie’s death, they had only been together for seven months, and had been living together for only four months. Additionally, Mr Higgins was well off (earning $324,000 a year as a magistrate) while Ms Petrie had previously been financially supporting her mother for items such as groceries and clothes.
While superannuation fund members can nominate who they which to inherit their benefits when they die, a fund can override this nomination if it is non-binding or if it otherwise does not comply with the Superannuation Industry (Supervision) Act 1993 (Cth).
Superannuation beneficiaries include:
Your spouse or de facto, but not former spouses;
Your children;
Someone financially dependent on you at the time of your death;
Your estate, but this requires legal help to override the beneficiaries listed above.
What is the lesson?
This case is a reminder of the need for effective estate planning to ensure that your assets pass to your intended beneficiaries. Superannuation, unlike assets such as real property, jewellery or shares, does not automatically become part of your estate.
To ensure your wishes are followed, you should make a binding death benefit nomination, which directs your superannuation fund to pay the benefit to your intended beneficiary. While your fund will consider a non-binding nomination that you may make, the trustee retains the power to nominate your beneficiary. In the current case, Ms Petrie made a non-binding nomination in favour of her mother, which was ultimately why the nomination was able to be overridden by the trustee of the fund.
Shand Taylor Lawyers is highly experienced in estate planning. If you require assistance with planning your estate and making a binding death benefit nomination, please contact Brad Clark or Kaylie Bourke.
Brad Clark, Partner (07) 3307 4527 bclark@shandtaylor.com.au
Kaylie Bourke, Special Counsel (07) 3307 4548 kbourke@shandtaylor.com.au