A recent and intriguing case in Victoria has seen a couple barred from claiming a multimillion-dollar estate due to a small ink spot concealing their names as beneficiaries on a will.

Howard Thomas, aged 75, had a three-page will dated in 2011, but a black ink mark obscuring the names of the beneficiaries in two key clauses led the Supreme Court to rule that he intended to revoke his will.

Known to be somewhat quirky, Thomas lived in what his friends described as an “uninhabitable” residence. The will was found by a former colleagues two months after Thomas’ death in his kitchen amongst a pile of dirty papers.

While the court could find no immediate heirs or alternative beneficiaries, the nature of the black markings was seen as indicative of Thomas’s intent to annul the entire will.

The absence of such clarity can lead to unexpected outcomes in estate matters.

Thomas had initially left his estate, worth around $4.46 million, to his close friends, Richard and Deborah Nightingale.

Upon Thomas’s death in July 2021, it was found that he had no immediate family, domestic partner, or children. His only surviving kin were six cousins, one filing for intestacy.

How did the will look?

While the ink mark had almost completely covered the Nightingales’ names in two key clauses, no other alterations or marks were found on the will, leading to the conclusion that Thomas intended to revoke it.

“Assuming the markings on the Will were made by the deceased, I am satisfied that the deceased intended to revoke it” ruled Judge Steven Moore.

Further, “the markings effectively obliterate the names of the executors and the beneficiaries, on its face stripping the will of its essential elements” he said.

What happens when you die without a will?

As a result of the blot of ink marking out the beneficiaries’ names, Thomas was ruled to have died intestate, leaving his estate’s distribution to be governed by local laws and potentially forfeiting it to the state in the event that there were no other beneficiaries.

Unintentional revocation due to a subsequent marriage, misplacement of the original will, or improperly prepared wills are common reasons for intestacy.

Lawyers often find that testators store their wills in secure places but need to inform people, leading to difficulty locating them.

What can I do so this doesn’t happen to me?

While such cases are rare, they prove the importance of having an up-to-date, clearly drafted, and easily accessible will.

Make sure you renew your will regularly, particularly after any major life events like a death or divorce in the family.

Make sure your will is being stored at your solicitor’s office and that your executor knows where to find it.

Renewing your will at Lockett McCullough Lawyers

Our office has large safe custody facilities in each of our offices, which are available to our clients to use free of charge.

This ensures that our wills do not get lost or mishandled.

Speak to our experienced estate planning lawyers at Lockett McCullough Lawyers to assist you with writing or re-writing your will.

If you pass away without a Will, you are said to have died “intestate”. When a person dies intestate, their estate is distributed in accordance with the “intestacy rules”. These are set out in Schedule 2 of the Succession Act (Qld) 1981.

Whilst the distribution of an intestate’s estate is somewhat straightforward where they have a spouse or a spouse and children, it becomes more complex when an intestate has passed away with more than one spouse and/or multiple children to different spouses.

How can you have more than one spouse?

Under the Succession Act, a “defacto” spouse is treated the same way as a spouse who was married to the intestate. That being the case, it is possible to have multiple spouses.

Where an intestate passed away on or before 1 May 1998, a defacto was deemed to be a spouse provided they had been living with the intestate for at least 5 continuous years, ending on the death of the intestate, or for at least 5 years in the 6 years prior to the intestate’s death, ending on the death of the intestate.

The definition of spouse was later amended and relaxed such that where an intestate passed away on or after 1 May 2003, a spouse included a defacto of at least 2 years (down from the previous 5 year relationship) and included defactos of the same sex.

The issue of multiple spouses then arises where the intestate was married, then separated and then entered into a new defacto relationship following their separation.

Distribution on Intestacy

Where an intestate passes away leaving a spouse and no children, the whole estate is inherited by the spouse.
Where an intestate passes away leaving a spouse and a child/children, the spouse will receive the household chattels and a “statutory legacy” of $150,000.00. The residuary (remainder) of the estate is then distributed equally between the spouse and the child/those children equally.

However, in situations where there are multiple spouses – each spouse does not get their own $150,000.00 or their own share in the residuary estate. Instead, the intestate’s estate is distributed as if there was only one spouse at the time of the intestate’s death and each spouse must share the distribution of only one spouse.

For example, if the intestate passed away with 2 different spouses and 3 children in total, their estate would be distributed as follows:

1. Household chattels would be distributed between the 2 spouses
2. The $150,000.00 statutory legacy would be distributed between the 2 spouses; and
3. The residuary would be distributed in 4 equal shares, such that the spouses received a one-quarter (25%) share between them and then the children received a one-quarter share (25%) each.

How is the distribution to the spouses calculated between them?

Whilst the intestacy rules are very clear in relation to the distribution of the estate, the distribution of the share received by the spouses is somewhat more discretionary. This is dealt with in section 36A of the Succession Act.

In recognition of the fact that both spouses may have contributed to the estate of the intestate and have competing claims as to who should receive a larger share of the $150,000.00 and the one-quarter share (going by the example above), the legislation provides for a process for the spouses to go through first, before simply deciding to distribute the share of the intestates’ estate equally between them.

In the first instance, it is hoped that the spouses will come to an agreement between them – a “Distribution Agreement”.
Failing a Distribution Agreement being made between the spouses, either spouse or the personal representative of the estate may apply to the Court for a “Distribution Order”. This involves the Court making a decision based on an outcome that is just and equitable. A court may, in its discretion, award the whole share in the intestate’s estate to one spouse rather than the other.
Initially, the personal representative of the intestate’s estate must give a notice to both spouses requiring them to either enter into a Distribution Agreement or apply to the Court for a Distribution Order.

Should the spouses not do either of these things within 3 months of the giving of the notice, the personal representative has the right to distribute the spouses’ share of the intestate’s estate between them in equal shares.

Upon the expiry of the 3 months period since the notice was given, if there is no Distribution Agreement or Application made to the Court for distribution, the personal representative may proceed with distributing the share in the intestate’s estate between them in equal shares.

Conclusion

Whilst the obvious lesson is to always have a valid Will in place to prevent your estate being distributed in accordance with the intestacy rules rather than your wishes, it is also important to ensure that any defacto separations or marriage breakdowns are finalised by way of Consent Orders or by way of a Binding Financial Agreement. These documents give you financial severance from your previous relationship and protect against a former husband or spouse receiving a share in your estate should you not have a valid Will in place, as the “multiple spouses” issue is then removed.

If you need assistance with your estate planning or in finalising your separation, please contact our experienced Wills and Estates Solicitors and our experienced Family Lawyers on 3870 824 (Toowong) or 3264 7692 (Albany Creek).

A personal guarantee is a promise to pay a debt that is owed by somebody else. Usually a personal guarantee is only called upon if the person who owes the money does not pay it when it falls due.

There are many circumstances under which a personal guarantee may be given. A few of the common scenarios are:

1. When a company is obtaining finance or entering into a lease, a personal guarantee is required (usually the director of the company) to secure payment of the amount owed by the company;
2. Similarly, where a family trust is obtaining or a lease, and the trustee of that trust is a company or an individual, a personal guarantee is required (usually the director of the company);
3. When parents or other relatives are guarantors of a loan given to their children by a bank. In the event that the children default on the repayments, the parents (as guarantors) will become personally liable to pay the amount owed.

Parents & Grandparents Being Guarantors

It is extremely common for parents and grandparents to give personal guarantees for their children’s or even their grandchildren’s debts – usually when purchasing their first properties. Sometimes it is in the form of a loan, or the guarantor allows the financier to encumber their own property.

Despite being a generous gesture, personal guarantees can be a serious and risky commitment especially when they are given by a guarantor who is later in life.

For example, in one case a personal guarantee was given to a financier by a 76 year old father for his 47 year old son’s $820,000 debt associated with a hydroponic herb farm that went bust.

Of course, if you have multiple children and provide financial benefit to some and not others while you are alive, the tension that creates in your family is obvious.

Separately from the prudence of giving a guarantee, however, there is another issue that can arise, namely – what happens to the personal guarantee you gave when you were alive, when you die?

The Effect of Death

A personal guarantee will usually last as long as the associated debt is outstanding. If you die while the personal guarantee is still alive (ie the amount is still outstanding), what does that mean for your estate?

Usually, subject to the terms of the guarantee document, the guarantee does not die with your death. Instead, your estate continues to be liable under your personal guarantee, which can have some unwanted consequences, such as:

1. Your estate cannot be finalised and completely distributed until the personal guarantee ends ie when the related debt is paid. This could take years
2. If the debtor defaults in paying the debt, your estate will be called upon under the guarantee to meet the debt. In most guarantee documents, the guarantor is not only liable for the “guaranteed amount” but also interest, enforcement and legal costs associated with enforcing the guarantee. This means your estate could be heavily depleted of funds resulting in less being left for the benefit of your beneficiaries.
3. If the guarantee was given for the benefit of one of your children, the other children who are beneficiaries of your estate will not be pleased if the guarantee is called upon and as a consequence, they lose some or all of their entitlements as explained above.

What to do?

So how can you try and make sure that your personal guarantee does not cause unnecessary grief for your executors and beneficiaries? Here are a few things to consider:

1. When giving the guarantee in the first place, don’t encumber your own property too heavily or stretch your guarantee too far. Think about the worst scenario – if the debtor did default, what would you comfortably be able to pay back?
2. Similarly, just because you could afford to give a larger guarantee at the time, doesn’t mean that you should.
3. Do nothing and leave the guarantee in place and hope that it won’t ever be called upon by the financier.
4. Communicate with the debtors, constantly re-evaluate the amount of the guarantee and reduce it where possible. For example, if you have given a guarantee to a family member to assist with the purchase of their first home, enquire as to whether the property has gone up in value, or if they have paid any lump sums off the debt. If so, they will likely be able to approach their bank to reduce the amount of your guarantee.
5. Get legal advice about the effect of your death on the terms of your particular personal guarantee and how you might adjust your Will to take into account the possibility of the guarantee being a burdon on your estate
6. Explore the possibility of getting personal guarantee insurance to protect you or your estate if the guarantee is called upon.

Ultimately, the best solution is not to give personal guarantees. However, the desire to assist family and friends is often strong and if you are fortunate enough to be in a financial position to give a personal guarantee, it is usually with pride and pleasure that you would be giving one. If it assists your children to get ahead in life and you can afford to do so, then why not?!

If you do want to proceed with giving a personal guarantee, at least obtain some good advice beforehand to assess what you can do to reduce the potential impact on you and your estate. Otherwise, you won’t be leaving generous benefits to your beneficiaries but, rather, a burdon which make take years to relieve.

If are considering giving a personal guarantee and would like some advice, please contact our experienced Wills and Estates solicitors – (07) 3870 8244 (Toowong) and (07) 3264 7692 (Albany Creek).

Obtaining a Grant of Probate from the Supreme Court is one of the main tasks that an executor of an estate can undertake. However, it is not just time consuming, it can also be a costly exercise as well. By the time advertising fees are paid for and solicitor’s fees and Supreme Court filing fees are paid, the estate can usually expect to lose a few thousand dollars.

However, sometimes it is not necessary to apply for a Grant of Probate when you are dealing with a deceased estate. That being the case, it is important to discuss the assets and liabilities of the estate with your solicitor to work out whether or not it is needed.

Why is Probate needed?

 The main reason why Probate is needed is that some entities that hold the deceased’s assets or maintain registers that record title to such assets, will not release these assets or record a transfer to the executor for distribution to the beneficiaries unless they have obtained a certified copy of the grant of probate from the Supreme Court. These can include but are not limited to financiers, super funds, insurance companies, the local council and utilities companies and the like. Retirement villages will almost always require a Grant of Probate to release the deceased’s exit entitlement.

We can help you to quickly identify whether you need to spend the time and cost to get a Grant of Probate, or whether the estate can be administered without going to the effort and expense.

When is Probate Unnecessary?

Whilst Probate is more often than not required when administering an estate, there are circumstances where it will not be needed, which we will outline below:

Property held as Joint Tenants

 Probate will not be required for any of the deceased’s assets that are held as ‘joint tenants’ with another person, (as opposed to ‘tenants in common’).  For example, it is common for people to own their family home as joint tenants with their spouse.  The deceased’s interest in the jointly held asset will technically not form part of the deceased’s estate and will instead pass to the ‘surviving joint tenant’, without probate being required.

For example, if a wife dies (and is survived by her husband), and her bank accounts, motor vehicles and family home are all held in joint names (as joint tenants), probate will not be required.

It is important to note that if property is held as tenants-in-common, the deceased’s share in that property will form part of their estate and probate will be required. This is because the deceased’s interest does not naturally pass to the other registered owner (which is the rule of survivorship). Real property owned other than as joint tenants will always require probate, no matter what the proportion of ownership may be.

Low value assets

An Executor of an estate can also generally avoid the need to obtain probate when the only assets of the deceased are of a low value, such as small share parcels or bank accounts.

Whilst every financial institution will have a different threshold as to the amount they will accept before Probate is required to release the funds, the general amount is usually a balance of somewhere in the vicinity of $20,000.00 – $50,000.00.

Each financial institution and share registry has its own low-value “cap” being the value that the asset must reach before it considers that probate or letters of administration are required to transfer ownership of the asset. Usually the calculation of the “cap” will exclude the value deceased’s principal place of residence.

From our experience, we are aware of the following thresholds for each major bank (which are subject to change at the discretion of the bank):

Suncorp Bank – $50,000;

Commonwealth Bank – $50,000;

ANZ Bank – $80,000; NAB – $50,000;

Westpac – $50,000; BOQ  – up to $75,000 on conditional circumstances;

Bendigo Bank – $50,000; and

CUA – $15,000

In order to transfer low-value assets it is generally necessary to establish that you would be the person administering the estate if probate were granted (e.g. by providing a certified copy of the Will), and that the owner has died (by means of producing the Death Certificate).

Financial institutions will usually require the executor named in the deceased’s last Will to sign an indemnity and release form which indemnifies that institution against any claims on the estate.

It is also important to note that even if an executor is successful with having estate funds released without obtaining a Grant of Probate, a cheque may issue in the name of the estate, eg “Estate of A Smith”. Unfortunately many banks will not allow the deposit of such cheques until a bank account is opened in the name of the estate and the opening of this account will usually require a Grant of Probate.

Intestacy

‘Probate’ is the process by which the Supreme Court gives the executors of an estate the power to distribute assets to beneficiaries.

However, in cases of intestacy if the deceased does not have a Will (also referred to as having died “intestate”), you do not need a grant of Probate.  You will instead need to apply to the Supreme Court for ‘Letters of Administration’. This is essentially the same process as obtaining a Grant of Probate, and with the same advertising process and similar forms to be completed, but it is slightly more onerous.

Letters of Administration will also be required where the deceased has left a Will, but the executors named in the last will have already passed away or unable or unwilling to act as the executor’s of the deceased’s estate.

In this case, another person (known as the ‘administrator’) , will apply to the Supreme Court for Letters of Administration to be given the legal authority to administer the deceased person’s estate in lieu of the executors named in the Will. Again, it is a very similar process to obtaining a Grant of Probate, but slightly more onerous.

If your loved one has died intestate, please contact us and we would be happy to assist you with obtaining a grant of Letters of Administration.

How can I work out if Probate is needed? 

In order to decide whether a grant of Probate or Letters of Administration are required, we recommend following the steps outlined below:

1. Compiling a list of Assets and Liabilities

 Firstly, it is necessary to identify all the assets owned in the deceased’s name and all liabilities of the estate, and record: 

• How they are held (e.g. solely, jointly, as tenants in common, etc);
• Where they are held (e.g. the name of the bank, the share register, the relevant Lands Titles Office, etc);
• *The current market value of each asset; and
• Whether there are any associated liabilities.

*Depending on how the assets are to later be dealt with, it may be necessary to obtain a formal valuation. For example, if the deceased has left their property to their two children in equal shares, but one child wants to buy the other out, a valuation will be required.

2. Transfer property held as Joint Tenants

 If assets are held as joint tenants, it may be necessary to lodge a ‘Request to Record Death’ with the Land Titles Office or various registries to record the passing of the joint interest to the surviving owner. In the case of real property, this will only require a certified copy of the death certificate to be provided.

3. Contact institutions where property held solely or as Tenants in Common

 If some assets are held in the sole name of the deceased, or as tenants in common (as opposed to joint tenants), then each organisation where those assets are held should be contacted to determine their ‘deceased estate transfer policy’.

If the value of the assets held with each institution are under their low value threshold or cap, then Probate or Letters of Administration should not be required.

The assets can generally be dealt with by providing the following documents to each institution where assets are held (eg. a bank, a share registry):

The Death Certificate; and

• A copy of the Will (if there is one);
• Certified copy of identification for the Executor;
• Some form of Indemnity and Release document completed by the Executor.

If you think that the value of the assets of the deceased are on the ‘borderline’ so to speak of requiring or not requiring a grant of Probate, it can be useful for your solicitor to also send an accompanying cover letter with the above forms providing a persuasive argument as to why the assets should be released without Probate. Arguments such as:

The deceased has few other assets;

• That institution would be the only institution requiring probate
• The estate is small and having to obtain probate would be costly
• The deceased left their estate to each of their children in equal shares;
• The beneficiaries all get along
• There are no claims being made against the estate,

can be persuasive arguments to convince the institution that Probate should not be require to release assets. Please contact us if you require us to liaise with an organisation and put forward a case as to why estate assets should be released without Probate.

 4. Obtain Probate if required

 If the estate includes real estate (e.g. a family home), and the real estate is not held in joint names or the institutions referred to in above Step 3 deny your request for a waiver of the requirement for Probate, then Probate (or Letters of Administration) will be required before the land can be transferred to the appropriate beneficiary.

This is because the land titles office will not anyone to deal with the property until they have the appropriate authority in the form of a grant of Probate. The main reason for this requirement is so that that institution can not be held liable for transferring or distributing estate assets to the Executor without formal approval being granted by the Supreme Court and so that the institution is not held liable for these things in the event that the estate is challenged.

If you do require a Grant of Probate or Letters of Administration, please contact us and we would be happy to assist you obtain a Grant or administer the estate.

When a loved one has passed away and their relatives or friends comes to see us for the first time, one of the first questions we are asked as lawyers is – how long does it take to get Probate?

What is Probate?

A grant of Probate from the Supreme Court of Queensland is the grant of official approval from the Court that certain requirements have been met in relation to a Will. A grant of Probate provides the executor with the legal authority to carry out the intentions of the deceased as expressed in the Will. In short, the Probate document issued by the court is evidence that the Will is valid and the executor is validly appointed.

A grant of Probate can be revoked at a later date if the Will is proved to be not the deceased’s last Will or if there are any errors found in the application for the grant of probate.

Similarly, where the deceased has died intestate (without a Will) or where the Executors named in the deceased’s last Will are unable or unwilling to act, another party (such as a spouse or close relative or friend) may apply for Letters of Administration.

A grant of Letters of Administration from the Supreme Court has essentially the same effect as Probate in that it allows the person who has applied to the Court to be appointed as Administrator of the Estate of the deceased, much the same as an Executor of an Estate is appointed under a grant of Probate.

How long does it take?

Obtaining a Grant of Probate or Letters of Administration in Queensland generally takes a minimum of 8 weeks from the start to finish.

There is a common misconception that obtaining a Grant of Probate or Letters of Administration can take 9 months, or even some years. However, it is important to note that obtaining a grant of Probate from the Supreme Court is just that – obtaining the grant. It does not mean or include the time taken to actually administer the Estate.

Obtaining the grant of Probate is only just the start of the estate administration process and it is needed for many parts of the estate administration, including to be able to transfer properties, release funds held in the deceased’s bank accounts etc.

The process and timing of obtaining a Grant of Probate or similarly a Grant of Letters of Administration can be broken down to the following 4 steps:

Step 1 – Advertising your Intention to Apply (Minimum 1 Week)

The first step to take to apply for Probate is to draft a Notice of Intention to Apply for a Grant and booking the advertising of the Notice.

The Notice must be published in the Queensland Law Reporter and another newspaper which is either:

1. A newspaper circulating throughout the state (usually the Courier Mail where the deceased lived in the Brisbane area); or
2. a newspaper approved for the area of the deceased’s last known residential address.

Bookings for most newspapers, such as the Courier Mail, can be made the day before publication. The cost will vary depending on the number of lines required for the publication, but will generally range from $450.00 – $550.00. For example, the cost for one Executor applying is likely to be a smaller cost than listing the full names of three Executors applying.

The publication of the Notice in the Queensland Law Reporter must be booked earlier, as it is published once a week on Fridays with bookings required in advance by the Monday before publication. Accordingly, the “advertising of your intention to apply” step can take up to a week.

To start the process of obtaining a Grant of Probate as fast as possible it is essential to make the first available publication of the Queensland Law Reporter. The cost of this publication is currently fixed at $161.70. Failure to do so results in a minimum extra week of waiting.

After the advertising of the Notice has been booked, it is also a requirement that the Notice be served on the Public Trustee. This may be done by post, fax or by delivering it to a Public Trustee office in person. The Public Trustee must be served a minimum of 7 days prior to making your application to the Supreme Court. This is so that they have sufficient time to go through their records and ensure that they do not hold a more recent Will for the deceased.

Step 2 – Notice Period (Minimum 2 Weeks)

After the publication of the last (Queensland Law Reporter or newspaper) Probate Notice, it is a required by law that two weeks (14 days) must past before an originating application for a Grant of Probate can be filed in the Supreme Court Registry. The rationale behind the two week Notice period is to allow any interested parties to have the opportunity to object to the application by lodging a caveat over the application for Probate or by giving the Executor notice that they intend to  challenge the Will.

The Probate Application documents are normally prepared and signed during the 2 week Notice Period ready for filing at the earliest opportunity after the Notice period has passed.

Step 3 – Supreme Court Registry Processing (Minimum 4 Weeks)

After filing an originating application to the Supreme Court Registry it generally takes 4 weeks to process the documents and can take up to six weeks depending on how many applications the Registry is processing at that time. The cost of the filing fee is currently $671.40.

The Registrar may ask questions relating to the application as required and issue a requisition (stop) to any application where further information is required to finalise the application. Requisitions lead to further processing time and can delay the obtaining of a Grant.

For this reason, we strongly recommend that you seek a solicitor to prepare and file your application, particularly where you are applying for Letters or Administration, as complications can arise where there is no Will or where the Executors named in the deceased’s last Will are wishing to renounce from their role as Executor.

Step 4 – Perfection of the Grant (Up to One Week)

Once a Grant of Probate or Letters of Administration has been granted (ie approved by the Supreme Court Registrar), the final document (the physical Grant) needs to be “perfected”. This involves the document being checked, printed, signed and sealed.

Upon the Grant being perfected, you or your solicitor will receive notification that the Grant is ready for collection from the Supreme Court Registry. The original Grant of Probate or Letters of Administration should be kept in a safe place and certified copies made to forward to all entities requiring a copy for the calling in of the deceased’s assets.

If you require a Grant of Probate or Letters of Administration for a loved one who has passed away, please contact us and we would be happy to assist.

Many Australians work hard to to build their superannuation funds to assist them with a comfortable lifestyle during retirement or to pass to their family members upon their death.

As superannuation is generally not accessible for working Australians until retirement age, it is easily forgotten as an important consideration in estate planning.

So where does your superannuation go when you pass away?

There is a common misconception that your superannuation will automatically form part of your Estate when you pass away. Accordingly, many people do not consider making arrangements with their superannuation fund to make sure that their Superannuation passes in accordance with their wishes and is received by their intended beneficiaries.

Every superannuation fund is different insofar as whether the trustee of the fund will permit members to make a binding death benefit nomination, a general nomination, automatically pay superannuation into the deceased’s estate or refuse to pay certain beneficiaries at all (some Government superannuation funds).

It is a crucial step in your estate planning process to check with your superannuation fund and see what type of nomination processes are available and ensure that you do what is required to ensure that your superannuation does pass in accordance with your wishes.

This is particularly important where you are part of a blended family, have had more than one marriage or have estranged children, as the ultimate beneficiary of your superannuation may not be as clear cut as may be the case in nuclear families.

Is superannuation distributed according to your Will?

As suggested above, your superannuation is not automatically distributed in accordance with your Will and does not automatically form part of your estate. The reality is that the distribution of your superannuation upon your death is governed by the agreement that you entered into with the trustees of your superannuation fund prior to your death and the relevant legislation. The exception to this is where you have nominated your estate as the ultimate beneficiary to receive your superannuation upon your death.

It is therefore imperative that you make a binding death benefit nomination under your superannuation agreement. This information should be shown on the annual report you receive from your superannuation fund.

If you are considering changing superannuation funds, it is important to check the succession planning options available with your new fund. Just because your previous superannuation fund may have allowed you to make a binding death benefit nomination does not mean that your new fund will allow the same thing and indeed, may have different options and requirements.

What type of nominations can you make?

It is not a simple matter of “nominating a beneficiary” and then not worrying about it any further. Each superannuation fund will have different options available and will require you to be reviewing or potentially updating your nomination every few years to ensure that the nomination remains binding. The types of nominations include the following:

• General Nomination – if you have nominated a beneficiary by way of a general nomination to receive your superannuation benefit upon your death, the trustee of your superannuation fund need only use this as a guide and do not necessarily have to follow your wishes. The trustee of your superannuation fund will have the ultimate discretion to determine who receives your superannuation benefits and it may not be in accordance with your wishes.

• Binding Death Benefit Nomination – this is a legally binding nomination. The trustee of your superannuation fund does not have the discretion to determine who your benefits are paid to upon your death and must pay your superannuation benefits to the beneficiary/ies who you have named in your nomination.

A binding death benefit nomination may be either lapsing or non-lapsing:

1. a general binding death benefit nomination will lapse after three (3) years unless it is confirmed, modified or revoked within that time. This means that you must ensure that you confirm your beneficiary every three (3) years to ensure that your nomination remains binding.
2. a non-lapsing binding nomination will not lapse unless it is modified or revoked. The Trustee of the superannuation fund is compelled to pay the benefit to your nominated beneficiary as long as they are an eligible dependent at the time of your death.

Most superannuation funds will offer a binding death benefit nomination, however, it is dependent on the rules of that particular fund. The benefit of correctly preparing a binding nomination is that it provides certainty that the nomination will not be challenged. You may need professional assistance to understand what type of nomination is provided by your fund.

Who can receive my superannuation benefits upon my death?

The Superannuation Industry (Supervision) Act (SIS Act) outlines who may receive payment of superannuation on the death of a member of the fund. Under the SIS Act, only a dependent defined under the SIS Act or your estate can receive your superannuation on your death.

“Dependent” is defined in the SIS Act to include a spouse, de-facto spouse, biological or adopted children and any person who is financially dependent on you.

This is particularly important to note if you have a Government superannuation fund, as often they will only pay to spouses and not to children or other beneficiaries.

What if I have a Self-Managed Super Fund (SMSF)?

It is becoming increasingly more common for Australians to roll their superannuation into a Self-Managed Superannuation Fund (SMSF).

As with normal industry superannuation funds, it is important to ensure that each member of the SMSF makes a binding death benefit nomination and that the nominations are kept in the superannuation binder held by the trustees of the SMSF.

When a member wishes to update their nomination, they will need to sign a new one and revoke their previous nomination.

If you have an SMSF but have not made a binding death benefit nomination, speak with your accountant or solicitor so that they can prepare one for you.

Contact us

Lockett McCullough Lawyers has extensive experience in estate planning strategies that ensure your best interests are looked after and your wishes are clearly set out in your Will.

Please contact us if you would like to seek professional advice when making your Will so that you can ensure that your superannuation is properly provided for.

* Please note that this information is general information only and does not constitute financial advice. We recommend that you seek specific information from your superannuation fund on the types of nominations available and obtain legal and financial advice which is specific to your personal circumstances.