Wills and Superannuation
Posted on June 16th, 2020
We trust that our latest Newsletter finds you and your family safe and well.
We note the easing of the Government restrictions arising out of the Covid-19 Pandemic and note that life for most people is slowly returning somewhat towards what it had been.
We have found during the Covid-19 restrictions that a lot of people took the opportunity to attend to numerous matters that they had perhaps been meaning to attend to earlier, but never found the time to do.
One area that we have been regularly dealing with clients on, is that of clients looking to update their Wills and Enduring Powers of Attorney (or perhaps even making a Will for the first time).
We have previously talked about the importance of everyone over the age of 18 years having a valid Will in place, especially if you own property or have significant assets in your Superannuation Fund.
A Will is, of course, a written document prepared in a particular format which spells out your wishes so far as your assets are concerned in the event of your Death.
A Will details who will receive your assets (the Beneficiaries) and who will supervise the distribution of your assets to the Beneficiaries and who will manage your Estate (the Executor).
Whilst not going over the previous details provided of who you should appoint as your Executor and what provisions you should make so far as your Beneficiaries are concerned, we have found that we have had to explain to clients numerous matters relating to their Will and in particular, we have been discussing with clients numerous matters relating to their Superannuation Benefits and the manner in which Superannuation Benefits should be considered and dealt within conjunction with their Will.
A persons Superannuation and/or Superannuation Death Benefits are not automatically part of a person’s estate to be distributed according to a person’s Will. The Trustees of a Superannuation Fund have the discretion to decide who receives the Death Benefits upon your death (subject to the terms of the Trust Deed) unless you have given the Superannuation Fund a Binding Death Benefit Nomination.
We have found that many clients are not aware of what might be the best way of providing for how they want their Superannuation Fund entitlements to be dealt with and whether their Superannuation Benefits should be dealt with pursuant to the provisions of their Will or dealt with outside of their Will.
A relevant issue is whether people should have a Binding Death Benefit Nomination in place so far as their Superannuation Fund entitlements are concerned. We generally believe that it is advisable to have a Binding Death Benefit Nomination in place (if you are able to do so in accordance with the terms of your Superannuation Fund Trust Deed).
A Binding Nomination is binding on the Trustees of your Super Fund and must be followed by the Trustees in the event of your death (as long as the Binding Nomination is valid and still in force).
You can choose to nominate your Estate or your “Legal Personal Representative” as the Death Benefit Nominee. This will have the effect of any Superannuation Monies or Death Benefits payable under your Superannuation Policy being paid to your Estate to be dealt with according to the provisions of your Will.
When making a Binding Nomination it is important that you ensure that you have considered the needs of ALL of your dependents when it comes to distributing your assets. This is because the Trustees of the Superannuation Fund have no discretion other than to comply with your Nomination. The Trustees assume that you have made your decision after careful consideration and do not have the power to consider the needs of any of your dependents of who you have not named as a Nominee.
Binding Death Benefit Nominations are valid for three (3) years, at which time they have to be renewed. If a Binding Death Benefit Nomination is invalid or if it has expired and has not been properly renewed, the Trustees will have the discretion to pay the benefits as if you had not made a Binding Death Benefit Nomination. Some Superannuation Funds do treat an invalid Binding Nomination as a “Non-Binding Nomination”.
You can, of course, revoke or change your nomination at any time by sending to your Superannuation Fund a new Death Benefit Nomination Form.
If you have a Self-Managed Superannuation Fund, then it is important to consider what your Trust Deed provides about how you can deal with your Superannuation Benefits in the event of your death.
Should you wish to obtain further information about your Will and your Superannuation Benefits and/or give consideration to changing your Will, please contact our office and we will be able to assist you and provide appropriate advice to you.
Greg Michel
Director
Macdonald & Michel Solicitors
https://macdonaldmichel.com.au
07 4972 3644