In the last couple of weeks, there have been many reports on the determination of Military Super with regard to the superannuation entitlements of the late RAAF Serviceman Daniel Leverton. There have been varying degrees of factual and legal accuracy in the media coverage in relation to Daniel Leverton and his entitlements from Military Super.
The issue in this case which has caused concern is that the majority of Daniel Leverton’s superannuation was paid to his de facto girlfriend despite the fact that he was survived by two young daughters. Like many people, you may have read about Daniel Leverton’s case and be wondering who will receive your superannuation entitlements if you were to die. We answer some key questions below to explain how you can avoid an unintended distribution of your superannuation:
What is a superannuation death benefit?
The term superannuation death benefit refers to a person’s superannuation entitlement after they have passed away. A superannuation death benefit includes the balance of any contribution a person has made to their fund. A death benefit may also include a substantial life insurance component. The inclusion of a life insurance component can result in a significant death benefit, meaning even a young person may have significant death benefit.
Who can access a superannuation death benefit?
Superannuation does not automatically form part of your estate so it may not be controlled by your will. You may consider putting in place a Binding Death Benefit Nomination (“BDBN”) which nominates your preferred beneficiary to receive the proceeds of your superannuation in the event of your death. If you do have a binding death benefit nomination, you should be sure to renew the nomination as often as the superannuation fund requires in order for it to remain a valid nomination.
If there is a valid BDBN then the superannuation fund must follow the BDBN. If the nomination is invalid, not binding or there is no nomination, the trustee of the superannuation fund determines who receives the proceeds of your superannuation. Eligible beneficiaries for superannuation benefits are the spouse, child or financial dependent of the person who has passed away. There are many aspects of a relationship that may be considered by the trustee of a superannuation fund when determining if there is a de facto spouse. Some relevant factors include living together, joint ownership of assets and the public reputation of the relationship (and yes this includes Facebook).
Alternatively the trustee of the superannuation fund may determine to pay the benefits of the deceased person to the executor of the estate. All potential beneficiaries may make application to trustee of the superannuation fund to have proceeds paid to them. If you are eligible to claim a superannuation death benefit of someone who has passed away it is important to attend to the necessary paperwork as soon as possible to ensure the best possible outcome.
What if you don’t agree with the superannuation decision?
In the event you are not satisfied with the decision or conduct of the superannuation fund you are required to raise your concern with the fund. If you are not satisfied with the outcome after raising your concern with the fund you can report the fund to the Superannuation Complaints Tribunal. It is important to be aware that there are time limits which apply to making a complaint to the Superannuation Complaints Tribunal. Once a matter is with the Superannuation Complaints tribunal, it can take two years to be finalised.
Some reasons for complaint about a superannuation fund include:
- Refusal by the fund to approve a claim;
- Not agreeing with the decision of the fund to pay a death benefit to a person or people;
- Unreasonable delay by the superannuation fund; and
- Miscalculation by the fund.
What this means for you
Many of the comments that have been made about Daniel Leverton’s case are that he would not have intended for this to happen. Whether Daniel Leverton would have intended for the majority of his superannuation to benefit his girlfriend is not something that can be determined in retrospect with any certainty. This uncertainty could have been avoided if Daniel Leverton had a binding death benefit nomination.
Importance of estate planning
What has happened to Daniel Leverton’s young children is a timely reminder for everyone that you need to consider your estate planning and take steps to ensure that your wishes will be carried out. While you may not be around, this case demonstrates that leaving things to chance can have a significant and detrimental impact on your family.
Get in touch with us
Our team practices exclusively in Wills and Estates Law and are here to guide you through superannuation matters. If you have any queries or require assistance dealing with a superannuation fund, we encourage you to contact us on (07) 3025 9000 for an obligation free initial case assessment.