A common oversight in Estate Planning is the failure to nominate, or failure to update, a beneficiary or beneficiaries to your superannuation fund or any life insurance policies. Arrangements that are otherwise very sound can be brought undone by simple oversights. Many people do not realise that their Will usually cannot allocate their superannuation benefits to their loved ones upon death.
Different superannuation funds have different rules surrounding the nomination of beneficiaries;
· Some will allow you to make a binding nomination;
· Some will not; and
· Some will allow you to make a binding nomination but require that it is updated after a certain time period, a nomination that is not updated may then expire.
The differences across superannuation funds make it easy for your wishes and your arrangements to fall out of alignment.
Leading Aircraftman Daniel Leverton
A Will for many, if not most people, will not deal with a large portion of their estate. This is because superannuation balances and any associated insurance benefits do not form part of a deceased estate. The family of Daniel Leverton learned this far too late. The serviceman had been prompted to update his Will prior to each deployment, but doing so didn’t extend to expressing his wishes as to the distribution of his superannuation savings and life insurance.
The end result, after his tragic and unexpected death while on holiday rather than deployment, was that a woman who had lived as a de facto partner with Mr Leverton for only 9 months became entitled to $352,170 out of a total of $451,500, while each of his two young daughters were entitled to only $49,664 each.
Mr Leverton’s de facto partner publicly defended her entitlement, and the remaining family of his young daughters publicly called it unjust and against what Mr Leverton would have wanted. We will never truly know what his thoughts would have been. He no longer has the chance to give effect to his wishes.
The experience of Daniel Leverton’s surviving family serves as an acute reminder of the importance of comprehensive Estate Planning. If you are unsure whether or not you have nominated a beneficiary for your superannuation fund, or whether or not a nomination you have made remains current, you should contact your superannuation fund.
Gavin Parsons and Associates can assist you with any questions you have regarding Estate Planning. Please contact us today on (02) 9262 4471.