Superannuation fund members’ ability to dictate where their retirement savings benefits will be distributed after their death may now be compromised due to new legislation.
The courts will soon have power to decide whether or not a binding death benefit nomination should be adhered to or if it should be contested as a result of changes to the Uniform Succession Act provisions.
All of the states have already agreed to the changes and in NSW they have been passed via the Succession Bill.
Superannuation benefits that have been subject to a binding death benefit nomination that was exercised within three years of the member’s death may now be treated by the courts as part of the deceased’s “notional estate”.
In the event of this happening the court then has the authority to decide how the notional estate’s assets are distributed, regardless of any existing binding death benefit nomination that may have been in place.
However, the court can only make orders regarding the notional estate in circumstances where there has been a family provision claim.
These claims can only be made by a limited number of people.
The new rules will take effect from 1 July this year.
