A recent determination of superannuation death benefits is a perfect example of the need for appropriate planning in relation to how your superannuation death benefits will be dealt with after death.
In a high-profile case, Magistrate Rodney Higgins was successful in his pursuit of his late fiancée’s death benefits, despite the fact that Ms Petrie had nominated her mother as her desired beneficiary. Unfortunately, superannuation laws can be quite complex and Ms Petrie’s mother was not eligible to receive the payment under the legislation. Mr Higgins and Ms Petrie made headlines in 2019 when it was revealed that the magistrate was in a romantic relationship with the court clerk, 45 years his junior.
There are a number of lessons that can be learned from situations like this one to make sure your death benefits are dealt with exactly as you would wish.
Nominating a beneficiary inside super isn’t as simple as just picking anyone you like. Superannuation law governs who is eligible to receive a death benefit payment from a superannuation fund.
The list includes:
Applying these rules to the case of 23-year-old Ms Petrie, it appears that Ms Petrie must have reached a position in her life where she was not interdependent with her mother.
Absolutely. If Ms Petrie had directed the trustee to pay her superannuation benefits to her estate in a binding nomination, then Rest Super would have been bound to follow her direction.
In this instance, Ms Petrie could then have directed her wishes for her estate through her will. While this may not have prevented a legal dispute, Mr Higgins would be required to challenge Ms Petrie’s will to claim any of the funds.
If you have nominated someone who is not a superannuation dependant as your death beneficiary with your superfund, the trustee of the fund (the superfund) has to make a choice on their own about where your benefits should go.
In the case of Ms Petrie, Rest super elected to pay her death benefit to her partner, Mr Higgins. Ms Petrie’s mother has appealed the decision and the pair have been disputing the sum for 15 months.
The simple answer to this question is seek advice. Your financial adviser can help you determine the easiest and most secure way to make sure that your death benefits are distributed in the way that you want them to be.
The key method to achieve this within the superannuation environment is through binding and non-binding death benefit nominations.
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