On 24 August 2018, the Queensland Supreme Court in the case of Re Narumon Pty Ltd [2018] QSC 185 found that the signing of a new binding death benefit nomination (which served to refresh a lapsing binding death benefit nomination which had been previously made by the member), by the incapacitated member’s financial attorneys, was valid.
The judgment in this case, however, was heavily reliant on the facts of the case which confirmed/verified the following:
- The Self-Managed Superannuation Fund trust deed expressly authorised the financial attorneys of a member to execute a binding death benefit nomination on the member’s behalf;
- There were no prohibitions in the Qld Financial Power of Attorney and, further, there are no prohibitions contained in the Powers of Attorney Act 1988 (Queensland), which would prevent an attorney for financial matters from signing or confirming a binding death benefit nomination on behalf of a member; and
- The signing of the binding death benefit nomination by the financial attorneys, that served to confirm the previous nomination made by the member, did not constitute a conflict transaction.
It remains my view and the view of many professionals in the field, that if:
- No previous death benefit nomination had ever been made by the member; and/or
- A fresh death benefit nomination had been executed by the attorneys which served to completely change the identity of the beneficiaries which had been previously nominated by the member; and/or
- The signing of the binding death benefit nomination by the financial attorneys would have resulted in a conflict transaction –
The death benefit nomination signed by the financial attorneys, on behalf of the member, would not have been upheld by the Court.
The lesson learnt:
Take care in the drafting or variation of:
- Superannuation Death Benefit Nominations;
- Self-Managed Superannuation Fund trust deeds; and
- Enduring Powers of Attorney (for financial matters).
