WA case highlights the importance of estate planning

Confused about the relationship between your will and your superannuation? Your superannuation death benefits can form part of your estate and be disposed of according to your will if:

• You have executed a valid binding death benefit nomination (BDBN) directing that the benefits be dealt with according to your will; or,
• In the absence of any BDBN, your fund’s trustee in its discretion decides to pay the superannuation death benefits to your estate.

If there is no BDBN directing the superannuation death benefits to the member’s estate, the fund’s trustee may decide to pay the superannuation death benefits directly to one or more of the member’s dependants.

A case in Western Australia highlights the problems that can arise where there are inconsistencies between a will and BDBN.  After the death of his wife, a husband who was the co-trustee and the other member of a self-managed superannuation fund holding significant assets resolved to pay the entire benefit to himself. This was contrary to his wife’s wishes expressed in her will that directed her superannuation be paid to her children, with none to go to her husband.

The children challenged this decision with the court, holding that the trustee of the self-managed superannuation fund could pay the death benefit to the husband (himself), and the children failed in their application.

If you have any questions about estate planning, you can call us on 5975 7588 or visit our website at www.carrollgoldsmith.com.au to arrange an appointment.