People are becoming increasingly aware of the importance of having in place a Binding Death Benefit Nomination to dictate who receives their superannuation on death.

Your superannuation is not an asset of your estate.

The Trustee of your superannuation fund will typically determine how any benefits are paid on your death – unless you have prepared a Binding Death Benefit Nomination which overrides any discretion of the Trustee.

In order for a nomination to be valid, there are certain requirements that must be strictly complied with.

Often a nomination will lapse after three years.

What happens when the nomination has lapsed and the member has lost their mental capacity and is no longer able to do a new nomination?

This is similar to what confronted the Queensland Supreme Court recently.

The Court, in deciding whether a person appointed under an Enduring Power of Attorney was able to make a new nomination on behalf of an incapacitated member, considered the:

  1. superannuation fund’s Trust Deed; and
  2. contents of the Power of Attorney document –in particular, whether there was any specific authority contained in it to allow the Attorney to take steps with respect to a Binding Death Benefit Nomination.

The Court found, in this particular matter, that the Attorney was authorised to prepare a Binding Death Benefit Nomination for the incapacitated member.

It is obviously important that you regularly review and update your estate planning.

Importantly, there is a need to consider whether an Enduring Power of Attorney should cater for an Attorney to confirm, extend or renew a Binding Death Benefit Nomination.

Any person who has been appointed as an Attorney should carefully consider what steps they might have to attend to, to ensure that “best laid plans” are not disrupted.