A not-so-binding death benefit nomination

SUSIE and John are high school sweethearts.

They marry young and shortly after, their son Joey is born.

Unfortunately, their marriage begins to deteriorate when Joey is only two years old.

In anticipation that they will soon divorce, John makes a non-lapsing Binding Death Benefit Nomination (BDBN) with his superannuation company, Super Super, in which he nominates Joey to receive all of his Super if he dies.

Six months after John makes the BDBN, he and Susie are formally divorced. John moves out of the matrimonial home and he sees Joey every second weekend.

Worried that Susie may try and claim his super in the event of him passing, John notifies Super Super of the divorce and provides them with a copy of the divorce orders.

John struggles to find rental accommodation of his own and moves into a share house with two other people, David and Priscilla.

Although his accommodation is not ideal, he manages to maintain a close relationship with Joey.

Two years after the divorce, John is tragically killed in an accident.

About a month after John’s death, a Super Super statement addressed to John turns up at the share house.

Priscilla opens the statement and sees that John had $200,000 in superannuation.

Priscilla writes to Super Super advising them that John had died.

She states that she and John were in a de facto relationship and makes a claim to receive all of John’s superannuation death benefit.

David provides a Statutory Declaration in support of Priscilla’s purported relationship with John.

Super Super make a determination to pay Priscilla all of John’s super, noting that his BDBN was invalidated by the divorce and therefore, they were not bound to follow it.

Had John’s family lawyer referred him to a solicitor who specialised in estate planning, John would have been advised to re-execute his BDBN after the divorce to ensure Joey received his super.

Thank you to Jamie Visco for his assistance with this column. Email Manny Wood, principal solicitor at TB Law at manny@tblaw.net.au or call him on (02) 66 487 487.

This column cannot be relied upon as legal advice.

By Manny WOOD, Solicitor