We have seen a trend in recent years of more and more SMSFs and other estate issues ending up in lengthy and expensive court battles.
This is particularly in the case of blended families. In order to avoid this, it is important to ensure that your will and superannuation death benefit nominations are documented correctly and accurately reflect your wishes.
Case studies
In the case of Hill v Zuda, the member had executed a Binding Death Benefit Nomination (BDBN) that differed from the format prescribed in the Superannuation Legislation and Regulations. Eventually it became a court decision as to whether this form was valid.
In this case, the High Court ruled that the BDBN was valid and that the deceased’s benefit was to be paid in accordance with it. The Judge ruled that if a fund’s governing rules allow, an SMSF member can have a tailored BDBN that allows more flexibility than that envisaged in the SIS legislation and regulations.
Another recent case, Bailey v Maddock, involved determining whether Mr Maddock had capacity at the time that his will was executed. This case showed the need for evidence that a person has capacity to approve the contents of the will at the time of execution. In the situation when the testator is elderly or there are potential questions in relation to capacity, it has been suggested that a medical opinion should be obtained stating any medical conditions and whether any such condition may affect their capacity.
Estate planning can be a complex area. If you are currently undertaking any changes to your documents, or planning to do so, please ensure you are obtaining the right advice.
