Superannuation » Binding Death Benefit Nomination declared invalid

The Supreme Court of Queensland, in its recent decision in Munro v Munro [2015] QSC 61, has found that a binding death benefit nomination was invalid, essentially due to incorrect terminology in the description of the nominated beneficiary. 

Mr Munro died in August 2011, and was survived by his wife, and two daughters from a previous marriage.

He had a self managed superannuation fund, and on 22 September 2009, he executed a document entitled “Binding Death Benefit Nomination”, in which he nominated “Trustee of Deceased Estate” as the beneficiary, rather than the “Legal Personal Representative” as required by the Trust Deed. Section 10 of the Superannuation Industry (Supervision) Act 1993 defines “legal personal representative” as the executor of the Will.

The Court considered that although the words “executor” and “trustee” were often colloquially used interchangeably, they were in fact different roles, as the trustee’s role only begins after the administration duties have been completed and the assets collected. As the assets had not been collected, the executors were not yet the trustees. Therefore the Court found that since the binding death benefit nomination had nominated “Trustee” rather than “Executor” or “Legal Personal Representative”, the deceased had not nominated a valid beneficiary in accordance with the Trust Deed, and therefore the nomination was invalid. The Trustee of the superannuation fund was entitled to decide to pay the entire benefit directly to the wife, which was not what the deceased had wanted or intended.

This decision highlights the importance of ensuring that your binding nomination has been prepared by, or checked, by a solicitor who practices in superannuation law.

Aitken Partners are able to provide specialised advice on your estate planning, including binding death benefit nomination, to ensure that your wishes are fulfilled.

 
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