Many people do not realise that having a Will does not cover where your superannuation will go in the event that you die. The recent tribunal ruling on the Daniel Leverton case is a wake-up call to think about the consequences of de facto declarations, which as it turns out, have as much weight as a legally binding marriage document.
Daniel Leverton, a RAAF military serviceman, died in April 2015 after surfing on the mid-north coast, at the age of just 40. His superannuation and life insurance of more than $450k was awarded to his girlfriend of nine months with whom he was in a de facto relationship with, leaving less than a quarter of his estate to his two young children, born to a previous partner.
Daniel’s Will stated for his estate to be left to his previous partner, the mother of his two young children, as the sole beneficiary of the estate. However, Military Super awarded most of his super to his girlfriend. This decision was challenged by his two children and the Commonwealth Superannuation Corporation found that his girlfriend was an interdependent spouse with whom he was living in a domestic partnership with, so the Trustee’s decision to pay to his girlfriend stands.
In this particular case, there was little weight given to his Will. In comparison, considerable weight was put on the statutory declaration Daniel had signed confirming his de facto relationship. There are some media reports that this declaration was signed with the intent of remaining in close proximity to his young children and not being posted to another state for his work, but it is not necessarily for the Trustee to consider what his intent was. They are required to look at the facts, documents and circumstances at the time of death.
Could this situation have been avoided? Perhaps not. The decision as to where to pay a member’s death benefit lies with the Trustee. A completed Binding Death Benefit Nomination states where a member’s super will be paid in the event of their death. However, Military Super is a little unusual in that it does not allow members to complete a Binding Death Benefit Nomination (BDBN). Most super funds, including SMSFs, do allow members to complete BDBNs nominating who their super is to be paid to.
The lesson learnt here is to check all the legalities before you sign any document and (unless you’re with Military Super) sign a BDBN and keep it up to date.
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Disclaimer: This publication has been prepared for general information purposes only. It is not specific advice to any particular person. You should consult an authorised Align Financial adviser before making financial decisions.
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