WENDY makes enquiries with her superannuation fund regarding the payment of her funds in the event that she unexpectedly passes away.
Wendy is advised that because she is not in a relationship and has no children, that she should execute a non-binding death benefit nomination.
She also has the option of making a binding nomination and the nominations can either be lapsing or non-lapsing.
The superannuation fund emails a blank form to Wendy.
The form allows her to nominate beneficiaries by name or nominate her “legal personal representative”.
The form states that her beneficiaries must be “dependents”.
Wendy simply wishes to nominate her mother as the recipient of her superannuation but finds the process incredibly confusing.
Nonetheless, Wendy writes her mother’s name on the form and submits it to her superannuation fund.
In a tragic turn of events, Wendy is involved in a fatal car accident several years later.
Wendy’s mother subsequently approaches the superannuation fund and requests the release of the funds to her.
Wendy’s death benefit includes a life insurance component, making the payment larger than she anticipated.
The superannuation fund advises that because the nomination was “non-binding”, they have the discretion to decide how the superannuation is to be paid.
The superannuation fund decides to pay half of the proceeds to Wendy’s father because her mother and father are both “next of kin”.
Wendy’s mother appeals the decision to the Australian Financial Complaints Authority (AFCA) on the basis that Wendy had clearly indicated her wishes, in writing, in the form that was provided to her by her superannuation fund and in circumstances where she had had nothing to do with her father for many years.
The appeal process takes three years.
Ultimately, AFCA overturns the Superfund’s decision and orders the payment of the whole of Wendy’s superannuation to her mother.
This case is a reminder that properly dealing with your superannuation is an important part of estate planning and given the complexities involved, it is important to get the proper advice.
This fictional column is not legal advice.
By Manny WOOD, Solicitor
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