Updates

Superannuation Death Benefits – Check Your Nominations!

Superannuation is a tax effective way to build your wealth for your retirement.

Under superannuation law, you can only nominate a superannuation dependant or dependants (at the time of your death) or your estate to receive your superannuation death benefit and any life insurance that may be held in that superannuation fund, on your behalf.

Having said this, we continue to come across scenarios where people truly believe that they can leave their superannuation death benefit to whomever they like, which is not the case.

Who is a Superannuation Dependant?

  • The member’s spouse or partner (de facto);
  • The member’s child (of any age) and this includes an adopted child, stepchild or a child born after the member’s death;
  • A person who is wholly or partially financially dependent on the member at the time of death, irrespective of their family relationship; and
  • A person who was in an interdependency relationship with the member at the time of their death.

If you have no superannuation dependants, you must nominate your estate to receive your superannuation death benefit.  If you leave a valid Will at the time of your death, the superannuation will then pass as per the terms of your Will.

Common Question: why can’t my parents be my nominated superannuation death benefit beneficiaries?

Unless you are in an interdependency relationship with your parents at the time of your death, you can’t nominate your parents to receive your superannuation death benefit.

If you would still like to pass your superannuation death benefit to your parents, you must nominate your estate as the beneficiary of your superannuation death benefit and then prepare a Will which provides that your superannuation death benefit passes to your parents. 

How do I nominate my beneficiaries?

When it comes to nominating a beneficiary, there are two options:

  • Binding Nomination
    If you make a valid Binding Death Benefit Nomination which has not lapsed and is in accordance with that superannuation fund’s trust deed and the superannuation laws, the trustee of the superannuation fund must pay your superannuation death benefit in accordance with your nomination.
  • Non-Binding Nomination
    If you make a Non-Binding Death Benefit Nomination, the trustee of the fund will consider such nomination, however, they will have the final say over which superannuation dependant beneficiaries and/or your estate and in which proportions will receive your superannuation death benefit

What happens if I don’t nominate anyone?

If you don’t nominate anyone specifically, the trustee of the superannuation fund has discretion and will need to decide which superannuation dependants and/or your estate and in what proportions, will receive your superannuation death benefit.

A Case Study

Meredith is single and loves spending time with her siblings and parents. In the event of her death, Meredith wants to make sure that her super is split so that her parents get half, while the other half is paid to her two siblings.

Her parents and siblings are not superannuation dependants of hers. For this reason, Meredith can’t make a death benefit nomination in favour of them directly. However, Meredith can make a binding death benefit nomination in favour of her Legal Personal Representative (i.e. her estate).

Meredith then arranges for a lawyer to draft her Will (with the superannuation to pass to her parents and two siblings) and Binding Death Benefit Nomination accordingly.

What do I do now?

To ensure you have appropriately nominated beneficiaries in respect of any superannuation you may hold:

  • Check that your super fund offers beneficiary arrangements that suit your circumstances;
  • Check those you have nominated or are nominating are eligible superannuation dependant/s and/or your estate;
  • If you plan to nominate your estate, ensure that your Will is current and up to date; and
  • If your death benefit nominations are lapsing in nature, ensure that you review and renew them before they expire.

 

New Guardianship Laws to begin in 2020

In 2018 the Victorian government first introduced the Guardianship and Administrative Bill 2018 to replace the initial Guardianship and Administrative Act 1986. The Public Advocate has now welcomed the biggest changes to the Victorian guardianship laws through the Guardianship and Administrative Law Act 2019 which comes into effect on 1 March 2020.

Why new legislation?

The Bill being introduced allows us to bring guardianship and administration matters up to date with changing legislation and more contemporary views on disability.

What changes are to be made?

The new Act allows a presumption that a person has the capacity to make their own decisions unless evidence is provided otherwise and recognises that a person also has decision-making capacity if they can make their decisions with support.

The Act also includes a new definition of decision-making capacity consistent with the Powers of Attorney Act 2014 and Medical Treatment Planning and Decisions Act 2016, where capacity is presumed unless there is evidence to the contrary.

The primary impact of the Act is to promote the human rights and dignity of persons with a cognitive disability to act independently, by having them to have the right to make, participate in and implement their own decisions that affect their lives and to allow them to be provided with the support they need to implement their own decisions. This also allows for the protection of persons with a disability from abuse, neglect and exploitation by giving them the right to act independently and managing and coordinating programs that promote the human rights of persons with a disability.

While the Victorian Civil and Administrative Tribunal (VCAT) has retained their power in relation to making guardianship and administration orders, there have been significant change to reflect a modern understanding of decision-making, capacity and disability. The new Act also enables VCAT to play a significant and supervisory role by appointing a supportive guardian, for personal matters, or supportive administrator, for financial matters, with the consent of a represented person for those who can no longer act independently. However, VCAT must ensure that a represented person’s preferences are still respected unless doing so would otherwise cause harm to the person.

Criminal offences introduced

The new Act has also introduced a new criminal offence provision in response to recent concerns regarding the abuse of vulnerable individuals and misuse of decision-making power. This provision will only apply to guardians and administrators who dishonestly misuse their power to cause loss to or obtain from financial gain from, a represented person, which carries a maximum penalty of five years imprisonment.

Breaking News: Victoria has Become the First State in Australia to Legalise Voluntary Assisted Dying

In December 2016, the Victorian Government first announced its intention to commence the proposed legislation for voluntary assisted dying framework in Victoria. On 29 November 2017, the Victorian Parliament passed the Voluntary Assisted Dying Act 2017. From 19 June 2019, Victorians who are eligible to access a voluntary assisted death, will be allowed such request.

Who is eligible to use the law?

Voluntary assisted dying is only available to Victorians who are over the age of 18 years, an Australian citizen or permanent resident, of sound mind (capable of making sound decisions, give informed consent and communicate their decision) and who have been diagnosed with an incurable disease/condition that causes unrelieved suffering and has a life expectancy of fewer than 6 months, or no more than 12 months for those with a neurodegenerative diagnosis.

What are the steps taken?

Firstly, the patient must make a verbal request, the person choosing to end their life must be the one to make the decision and cannot be made by anyone else on their behalf (Doctors who suggest voluntary assisted dying to patients will face a professional misconduct investigation).

The Doctor must then assess the patient to determine their eligibility for the scheme in the first instance. Once assessed, the patient must then make a written request to an alternative doctor in the form of a declaration, signed in the presence of two witnesses. The alternative doctor will also perform another assessment of the patient to confirm their eligibility for this scheme.

Once this is undertaken, the patient then must make a final verbal request to the co-ordinating doctor, at least nine days after the first request. The co-ordinating doctor will then conduct a final review to certify the request and assessments.

They will then apply for the voluntary assisted dying permit, either for self-administration or practitioner administration, depending on the assessment of the patient. Once the application is submitted, it is handed to the Victorian Department of Health and Human Services, who will review and approve the request for voluntary assisted deaths.

If a patient wanting to use the scheme does not agree with the decision made by either doctor who assessed their eligibility to do so, the patient may apply to the Victorian Civil and Administrative Tribunal (VCAT) to review the decision.

In reviewing the doctors’ decisions, VCAT will consider the following issues in determining whether a patient meets the eligibility requirements for the scheme:

  • The patient usually lives in Victoria;
  • The patient was usually a resident of Victoria for at least 12 months at the time of making his or her first request for access to voluntary assisted dying; and
  • The patient has capacity to make a decision about voluntary assisted dying.

Interestingly, after day one of the legislation being in place, I had a client ask if it was possible for him to put his request in for assisted dying in his Appointment of Medical Treatment Decision Maker (i.e. Medical Power of Attorney) in order that his medical decision maker could assist him with this process should he lose capacity.  Of course, this is not allowable under the present framework, however, it highlighted to me one of many ways in which this legislation may be misinterpreted and dangerously abused!  What are your thoughts?

Queensland Court Finds a Phone Video can be a Man’s Legal Will

An informal Will is a document which purports to state the testamentary intentions of a deceased person but has not been executed in accordance with the formal requirements of making a valid Will.

A Queensland Court has found that a smartphone video filmed several years before a man killed himself, can ultimately function as a legal Will.

Leslie Wayne Quinn left behind his wife Leanne Quinn, of whom he had separated but not divorced, and three sons (two with Mrs Quinn and a son from a previous marriage).

During Mr Quinn’s lunch break at work in 2011, he decided to quickly record a video leaving all his possessions to his wife, where he stated:

“In the event of my death, I would like all my goods, my interests in property… my share of those to go to my wife, Leanne Quinn, anything, any money that I have, cash, I’d like that to go to my wife Leanne. That, I think is basically it, so this is my only Will.”

Usually, if there is no formal Will, in Queensland, the Public Trustee of Queensland then divides the estate left behind between the deceased’s immediate family, such as their surviving spouse and any children.

Instead, Mrs Quinn decided to make an application to the Public Trustee claiming that the video should be considered as his formal Will, therefore requiring that his estate only be passed to her.

Senior Judge Administrator of the Supreme Court of Queensland, Ann Lyons, said that it was clear in the video what Mr Quinn’s intentions were and, accordingly, it was to function as his last Will.

In my view there can be no doubt that Mr Quinn made the recording to make clear what his intentions were in relation to the disposal of his possessions after his death. Mr Quinn called the recording his ‘last Will’ in his opening remarks and spoke about the distribution of his property ‘after his death.’ He therefore understood it was to operate after his death.”

“Having considered the recording I consider that Mr Quinn expressed a firm intention to leave all of his assets to Mrs Quinn, given the relatively young age of his children at the time of the recording, such an intention is entirely logical in the circumstances.”

In a digital age, we need to be more aware of the potential implications of such ‘informal’ wills, particularly in circumstances where the person making such an informal will may not have been given any legal advice.

Attorney-General Argues a Sperm Donor is a Parent – what does this mean on death??

The term ‘parent’ is currently expressed under the Family Law Act (Cth) to mean a child’s biological parent, unless there is express provision for an alternative.

Sperm donors in Australia have never been considered as the parent of the child and not named on the birth certificate, unless they were married or in a de-facto relationship with the mother at the time that the child was conceived. Under the Status of Children Act 1974 (Victoria), there is a presumption of law that if a woman becomes pregnant from an IVF procedure and a child is produced and born as a result, the man who produced the sperm is not the father or a parent of that child.

The Federal Attorney-General, Christian Porter, has recently intervened in a High Court case involving a Newcastle man Robert Masson, who has been trying to stop the mother, Susan Parsons, of his biological daughter from relocating with the child, who is now aged 12 years, to New Zealand.

The pair had been friends for 25 years when they mutually agreed to Mr Masson becoming a donor to Ms Parsons, in order that she could conceive a child though an ‘informal artificial insemination procedure.’

The Attorney-General has argued that the term ‘parent’ should be expanded to include donors in certain cases who are not married or in a de-facto relationship with the mother prior to conceiving the child, but who are known to that mother.  Will egg donors also be considered in the same manner?

On death, in Victoria, the term parent is currently defined under that Administration and Probate Act 1958 to include a person who has day to day care and control of the child and with whom the child is ordinarily resident.  The definition does not provide any assistance as to who else may be considered a ‘parent’ for the purposes of death.

If the Family Law Act definition of a parent is expanded to include sperm donors in certain circumstances, what impact will this have on the interpretation of a Will, when a parent is included as a beneficiary of that will?  What about on guardianship laws if the other biological parent has died and the child concerned is still a minor?  If there is no Will, on the operation of the intestacy rules, it is a possible that the sperm donor, who may be considered as a parent, could receive that child’s (even an adult child’s) entire estate!  If the ‘sperm donor’ parent has died, does that mean that the child can then contest that parent’s will?

In light of the proposed changes, careful consideration should be given to the drafting of your estate planning documents.

Law Institute of Victoria Supports National Power of Attorney Registry Scheme

Making an Enduring Power of Attorney (EPOA) enables individuals to plan for the future, however, as much as everyone has the right to make their own decisions, there may come a time where you do not have the capacity to make your own decisions, whether it be due to an injury or illness.

By making an Enduring Power of Attorney, it allows you to appoint a person or persons who you trust to make certain decisions on your behalf.  You are eligible to make an Enduring Power of Attorney if you are aged 18 years or older and have the requisite capacity to do so.

The Law Institute of Victoria (LIV) has recently introduced their support of a national register where it will provide a reliable source for individuals to efficiently verify that an Enduring Power of Attorney is valid and current, which can minimise the incidence of the Enduring Power of Attorney document being misused for financial abuse purposes.

Far too often we see in practice, a scenario whereby a bank teller is presented with a power of attorney document (even if it has since been revoked or superseded) and happily acts on that basis without seeking to verify that it is, in fact, the current power of attorney document.  The introduction of a national register would certainly prevent such a scenario from occurring.

However, there is debate over the design of the register, as, given that it will contain private and confidential information, such as details of a person’s bank accounts and properties, it will need to deal with the issue of what information can be made publicly available or only made available to a registered user who will then pay a fee to view the document and information.

A similar registry system already exists and currently operates in Tasmania with their Land Titles office, where these documents are available to third parties and there is reliance on the register to then determine validity of the document.

We are in total support of the implementation of such a national registry and we will keep you updated as to any developments in this regard.

The Importance of Having an Up-to-Date Will

We are seeing a disturbing new trend where there are more people dying in Australia without leaving a valid Will.

Which leads us to the next question…do you really need a Will?  A Will is a way for you to provide clear directions as to how you wish to leave and divide up your hard-earned assets on your death.  Without a Will, you cannot decide who will control your affairs on your death, who will take care of your minor children, you cannot make gifts or donations or benefit those people that you wish.  In a blended family situation, dying without a Will cannot often result in expensive and emotionally fraught litigation on that person’s death.

When should you update your Will?

 A new Will should be made in the following circumstances:

  • Acquiring new assets (e.g. a new property);
  • Disposing of assets;
  • Marriage;
  • Separation;
  • Divorce;
  • Addition of new family members (birth of children or grandchildren);
  • Children becoming adults;
  • After the death of a beneficiary listed in your Will; and
  • The commencement or disposal of a business interest.
  • What happens if you die without a Will?

 

You are deemed to have died intestate and the succession laws of the state or territory in which you are considered domiciled, will determine the succession of your assets.

For example, if you die intestate in Victoria:

  • In a nuclear family scenario (husband/wife + children to that relationship) = all estate goes to surviving spouse in first instance
  • In a blended family scenario (second spouse and children not of that spouse) =

second spouse receives a statutory legacy (currently $451,909), all personal chattels and half of the balance of the estate with the children from another relationship to share in the remaining half of the estate

  • Complex division if more than one spouse/partner of deceased and children

It is advisable to have your Will reviewed at least every 5 years.  It does not mean that you will necessarily have to incur the expense in preparing a new Will, but it is a good timeframe in which to check in and see that your Will is still appropriate in your present circumstances.

The Government’s My Health Record and Estate Planning

There has been a lot of media publicity of late around the issue of whether or not people should opt in or out of the Government’s somewhat contentious My Health Record which comes into full effect on 31 January 2019.

The My Health Record is an online summary of your key health information, which can be viewed online, by yourself and any of your health providers.  You can manage your My Health Record and even add the details of an advance care plan to such record.

You will be able to set up privacy and security settings to enable or restrict certain people and/or health providers from having access to some or all of your health history and/or any documentation.  Importantly, you will be able to see who has accessed your My Health Record.

From an estate planning perspective, the My Health Record is another form of digital asset that you will now need to decide who you give access to on your death.

In addition, if one of your attorneys under a Power of Attorney document has access to your My Health Record and notes that a doctor has stated that you have lost capacity to make decisions for yourself, it may invoke the operation of a Power of Attorney much earlier than it otherwise would have, especially if the extent of your capacity has not yet been fully ascertained.

CONTESTING A WILL AS A ‘PARTNER’ AND CLAIMING CENTRELINK ALSO – BE AWARE!

On 17 October 2018, a great-grandmother in Geelong, Victoria, Noel Newling, was sentenced to two years and 10 months jail for concealing her relationship with a wealthy share trader for more than 20 years, whilst claiming a single pension.

The woman was forced to concede her relationship status in a bid to contest her partner’s Will who died in 2016 with an estate worth in the order of $4 million.  A judgment has not yet been handed down by the Supreme Court of Victoria in respect of this case.

The Human Services Minister, Michael Keenan has advised that irrespective of a person’s background or age, there will be consequences.

Many people who contest a will are those who claim they were in some form of domestic or de-facto relationship with the deceased person at the time of that person’s death.  Often, however, such claimants have been claiming Centrelink pensions for many years as a ‘single’ person.  Similarly, the deceased person may have also been claiming a ‘single’ pension during his or her lifetime.

Therefore, bringing a claim for further provision from an estate should be carefully considered in circumstances where such a fraud has been committed.  Not only could it result in monies being repaid to the government by the claimant but also that person being jailed, but also, monies could become repayable by the deceased person’s estate to Centrelink.  Nobody wins!

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