Hypotheticals by Manny Wood. Published in the Coffs Coast Advocate on 20 October 2018.
Rodney is married to his second wife, Elizabeth.
As part of his Estate planning, Rodney decides to transfer the title of his home, which was in his sole name only, into joint names with Elizabeth and to do likewise with his bank account.
He then makes a non-binding death benefit nomination whereby he nominates his estate to receive the proceeds of his substantial superannuation fund.
In his will, the superannuation benefits are to be held on trust for his three children from a former relationship, until they turn 25.
Elizabeth was financially dependent on Rodney at the time of his death in 2018 and his children were not.
The trustee of the superannuation fund nonetheless decides to pay Rodney’s death benefit to his estate as per the terms of the non-binding nomination. Elizabeth disagrees with the decision and makes an application to the Superannuation Complaints Tribunal on the basis that she is the only financial dependent and that she should receive a share.
The Tribunal’s decides to approach the matter by considering what would have occurred if Rodney hadn’t died and whether there was anyone who had an expectation of ongoing financial support.
The Tribunal recognises that Elizabeth will receive the house and bank accounts because they were jointly owned.
The Tribunal states that it was fair and reasonable for the superfund to have regard to Rodney’s wishes in exercising its discretion as to whom the death benefit was paid and ultimately affirms the fund’s decision.
If Rodney had made a binding death benefit nomination, Elizabeth would not have been able to challenge the fund’s decision and would face a risky family provision claim to obtain more from Rodney’s estate.
If you would like Manny to address a particular legal issue, send your request to manny.wood@ticliblaxland.com.au or call him on (02) 6648 7487.
