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Superannuation Death Benefit Considerations in the Estate Plan

This Article has been adapted from a presentation that the author made for the Law Society of NSW in their Elder Law, wills and Probate: One day Intensive on 12 March 2024

Introduction

Since the introduction of compulsory superannuation contributions in 1992 the superannuation industry has grown to become a $3.5 trillion industry as at June 2023.  Of that total amount approximately $884 billion are held in self-managed superannuation funds (SMSFs).

For any estate planning lawyer it is crucial to consider as part of the estate plan what will happen to a client’s superannuation death benefit upon their passing. [...]  READ MORE →

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Writing your own Will and Will Disputes

Will Disputes – A Cautionary Tale Against Trying to Write Your Own Will:

Etherton v Mitchelmore [2024] NSWSC 170

Caterina Felice Bohen (‘the Deceased’) died in August 2021. She was survived by two adult daughters and five grandchildren. In a will dated 10 August 2016, the Deceased purported to leave her grandchildren most of her estate. At the end of 2020, the Deceased handwrote a note on the back of a used envelope that read ‘I, Caterina Felice Bohen wish to leave my house to Robin Etherton of Roseville, as he was the only one who ever helped me when I needed help’. She then gave this to Robin Etherton without retaining a copy. The central issue in this case was whether this document could be accepted as one that contained the Deceased’s testamentary intentions. [...]  READ MORE →

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The importance of making a will as a Parent.

You can’t choose your family: sibling rivalry over adult son’s claim for further provision, highlights the importance of making a will as a Parent.

A son’s application for a late inheritance claim was recently turned down by a Queensland court. After more than two decades of rent-free living in one of his father’s residences, the son requested further provision from the estate. This case demonstrates the challenges that may occur when a parent dies without leaving a will and provides important guidance for anyone hoping to seek further provision from the estate without the necessary supporting evidence.

The Case: Day v Peake [2023] QDC 178

Facts:

The applicant, Lloyd Day, is the adult son of the deceased, Desmond Gunston Day, who died intestate (without a will) at 95 years old on July 25, 2020. Desmond was married twice and fathered seven children, six of them survived him.  The eldest child, Rosemary Peake, was granted letters of administration (a court order which allows the administrator to distribute assets and manage the estate) on August 2, 2021. Scott Day, initially applied for further provision from the estate on October 19, 2021, with Lloyd joining the application on March 30, 2022. Scott and Lloyd (the applicants) lived in the two properties namely 51 and 55 Sutherland Street Calliope, that comprised the entire estate, valued at approximately $440,000. [...]  READ MORE →

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Can a Will signed on an iPad be admitted to Probate?

This was the key issue of determination in a recent South Australia Supreme Court decision.

In Re Estate of Elizabeth Seabrooke (‘deceased’) [2023] SASC 122 (‘Seabrooke’), Elizabeth Seabrooke (‘the deceased’) died on 24 April 2022. Prior to her death, she executed a Will on an iPad, signed with an iPad pencil and executed in the presence of two witnesses who did the same. The deceased then scanned the electronic Will and sent it to herself.

The deceased named her daughter Natalie Beresford as executor (“the executor”) of the Will. On application to have the will admitted to probate, the executor sought to admit a printed copy of the scanned electronic will as the last will and testament of the deceased. The original electronic will could not be located on the iPad on which it was prepared and signed, however a copy was saved on a USB which had been lodged to the Registry. The matter was referred from the Registrar to the Supreme Court for determination. There was no argument that the Will did not contain  the necessities required such as a clause revoking all prior wills and codicils as well as a named executor and beneficiaries of the deceased’s property and assets. What was left for the Court to determine was whether a copy of the ‘document’ executed as a last will and testament should be admitted to probate. [...]  READ MORE →

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When there’s a will, there’s a way!

Aveyard v Selwood; Philpott v Selwood; Riley v Selwood [2024] NSWSC 29

Where there’s a will, there’s a way

A recent Supreme Court Decision has demonstrated that when there is a will that does not allow for the “proper maintenance, education or advancement in life” of eligible persons ie family members, the Court will make an order for provision out of the estate of the deceased to do so.

This case involved three applications made for provisions under s 59 of the Succession Act, submitted by late John Raymond Selwood’s (the Deceased) daughters regarding the Deceased’s will dated 23 March 1984.

The Deceased’s will left his estate as follows: [...]  READ MORE →

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The Trouble with the Bank of Mum & Dad

How is the transaction characterised – is it a “loan” or a “gift”?

In Australia even if a parent thinks a transaction is a “loan”, unless there is evidence (ideally by being documented) there is a presumption that the transaction was a gift. Therefore if the parent actually intends the money to be repaid at some point in time it should be documented in a relevant loan agreement or deed.

Documentation of the transaction is essential

Documentation of the arrangement is also important for a number of other reasons which include the following:

  • Sometimes these arrangements may be in place for years or even decades and it is important to clearly set out what the intentions of the parties are so as to minimise the chance of disagreements down the track.
  • Depending upon the terms and the circumstances, a properly documented loan agreement or deed may be able to provide some protection should the debtor become bankrupt or divorced.
  • Documentation can be critical in confirming the arrangements regarding the loan in the event that a parent becomes incapacitated or passes away.
  • A properly documented arrangement can also allow for appropriate security measures being put in place such as a registered mortgage or at the very least a caveat over real property.

Consideration of how these arrangements will impact on your estate planning

If you have provided “loans” or “gifts” to children and these benefits have not been equal between the children during your lifetime you should consider whether your will needs an equalisation clause so that all your children will ultimately end up with substantially the same benefits during your lifetime and as part of your estate. [...]  READ MORE →

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Basic Will For a Competitive Price

Wills – not exactly the best BBQ conversation material.  If you are like most people, you only tend to think of Wills in the dead of night, worrying about what will happen to your loved ones if you die. Younger people also do not tend to think about preparing a first Will however with marriage, the purchase of assets (like a family home) and the start of a family, having a Will prepared is a necessity.

If you happen to see one of those TV commercials late at night promoting the benefit of the ‘do it yourself’ simple will kit it may at first glance seem like the perfect solution – quick and cheap. [...]  READ MORE →

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Wishful thinking: when is a “wish” expressed in a will binding on the executor?

A recent New South Wales Supreme Court case has once again highlighted the critical importance of careful wording when drafting a will.

The will in question made a bequest to nieces and nephews of the deceased, then a clause of the will went on to say:

“It is my wish that the funds be used to assist in purchasing a property and assist in their education but does not include any HECS or equivalent educational debt.”

The Court was asked to decide the following question about the wording of this clause: were the gifts to the nieces and nephews to be used for no other purpose than property purchase and education?  In other words, was the deceased’s “wish” binding on the executor of the will and the beneficiaries? [...]  READ MORE →

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“Drafting a Will is simple, and cheap…isn’t it?”

When it comes to drafting a will, working out who is going to get what out from your estate is the hard bit.  After you’ve figured that out, the actual drafting of the will is just a straightforward process, and anyone can do it – no need to get a wills lawyer involved.  That’s right, isn’t it?

Well, yes and no.

Most well-written wills follow a simple structure and avoid the use of legal jargon as much as possible.  When it comes to reading a will that was not drafted by a will lawyer and interpreting what it means, a common sense approach is encouraged.  If such a will contains a few technical glitches or inconsistencies, that should not matter provided the intention of the deceased is clear enough. [...]  READ MORE →

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WHY GET A WILL LAWYER TO PREPARE YOUR WILL?

Wills – not exactly the best BBQ conversation material.  If you are like most people, you only tend to think of wills in the dead of night, worrying about what will happen to your loved ones if you die.  Or if you happen to see one of those TV commercials late at night promoting the benefit of the ‘do it yourself’ simple will kit.  At first glance that might seem like the perfect solution – quick and cheap.

So why on earth would I pay more to get my will drafted at a law firm?

A ‘simple’ will may be all that you require.  However, a will that best addresses your own unique circumstances may not come in a ‘one size fits all’ package.  For example, if [...]  READ MORE →

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Superannuation is an important part of estate planning

The proceeds of superannuation accounts do not automatically fall into the estate of a deceased person and are not automatically dealt with in your Will.

To ensure that superannuation proceeds are properly dealt with, it is important to understand:

  • how superannuation can be dealt with – who can be the beneficiaries;
  • the process surrounding payouts of superannuation proceeds;
  • who might be able to make a claim against superannuation proceeds (which can be in addition to claims against an Estate or disputing a Will);
  • how superannuation payments are administered; and
  • importantly, the use of binding and non-binding death benefit nominations in superannuation and the benefit and pitfalls of nominations.

Nominations

Binding and/or non-binding death nominations for superannuation accounts are often not given enough careful thought. How can you make them effective and ensure the proceeds pass to desired beneficiaries? What happens if a named beneficiary dies? What are the tax issues and practical issues arising in each individual situation? What discretion does a trustee have and/or how can you make sure what you want to happen actually happens? [...]  READ MORE →

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De Facto Partners and Intestacy

De Facto Partners and Intestacy: Understanding De Facto Partner Entitlements

When someone passes away without leaving a Will they are considered to have died intestate.  In such situations the distribution of the deceased person’s estate is determined by statutory rules.  The Succession Act of 2006 (NSW) (the Succession Act) outlines the statutory rules for distribution of an intestate estate.

In determining who is considered as the next of kin entitled to the intestate estate, the Succession Act gives a broad definition to the term ‘spouse’. According to section 105 of the Succession Act, a ‘spouse’ includes someone legally married to the person who has died intestate or was in a domestic partnership with the person who has died intestate, immediately before their death. A domestic partnership also includes a registered relationship or a de facto relationship that has existed continuously for a minimum of two years or has resulted in the birth of a child. [...]  READ MORE →