As succession lawyers, we are committed to achieving our clients’ succession goals. We do this by staying up to date with developments in the law and listening to what our clients want.
We are very excited that there have been recent changes to the State Superannuation Regulations 2001 (WA) in the space of superannuation death benefit planning. It appears many of our colleagues in this area are not yet updated on these new developments, and so we thought it was prudent to share this information with not only our clients and the community but also our colleagues.
Superannuation is increasingly becoming a significant asset (for many people it is their most significant asset). Despite this, we find many people come to us unaware of how their death benefit is dealt with on their death. For a detailed article on superannuation death benefit planning, click here.
The reason for our excitement in the changes to the State Superannuation Regulations 2001 (WA) is that we can now provide more options for our clients who are GESB Super Members in their succession planning.
Previously the payment of a death benefit under reg 121(1) State Superannuation Regulations 2001 (WA) was automatically paid to the executor or administrator of the Member’s estate. This meant the death benefit formed an asset of the deceased member’s estate. For many, this caused uncertainty on who their death benefit would be paid to and limited their options for their succession planning. Some of the consequences it caused were:
- The death benefit forming part of the estate
- If they did not have a Will, their estate would be distributed in accordance with s 14 Administration Act 1903 (WA) – possibly resulting in unintended beneficiaries benefiting
- If they did have a Will – The funds as an estate asset could be subject to a family provision claim (that is, where the proposed distribution of the estate is disputed by eligible family members) – possibly resulting in unintended beneficiaries benefiting. If you have GESB and your estate planning involves a potential family provision claim, please urgently call this office to discuss establishing a valid GESB nomination.
- Delay in beneficiaries accessing the funds because GESB could not release the funds until an executor or administrator was appointed by the Supreme Court of WA – sometimes this can be an extremely length process
- Unintended beneficiaries receiving the death benefit
- Unintended tax consequences
On 8 May 2021, an amendment to regulation 121 of the State Superannuation Regulations 2001 (WA) was made to permit a GESB Super Member to give a binding death benefit nomination. This is a huge development and extremely beneficial from a succession planning perspective. The other benefit of this is that they are non-lapsing nominations, meaning they do not lapse. This can provide assurance to members that intended beneficiaries (provided they are dependants as described below and that a valid binding death nomination is in place) will receive the member’s death benefit upon their death.
A member can nominate a dependant to receive the death benefit and provided the nomination is valid, it will be binding on the Board. This means GESB has to pay the funds in accordance with the member’s nomination.
Under superannuation law, the following people are considered dependents of the deceased person (s 10 of the Superannuation Industry Supervision Act 1993 (Cth):
- Their spouse
- Their Child (of any age)
- An interdependent of the deceased
GESB has a specific form for making a binding death benefit nomination. There are also specific regulations on the differing policies.
If you need advice on your superannuation death benefit planning, book an appointment by clicking here or phone our office on 6381 9500.
Our tailored advice on superannuation death benefits is standard in all of our estate planning packages. In light of the above changes, we want to ensure GESB members have an up to date estate plan catered to the new allowance of a binding death benefit nomination. From 29 December 2021 – 28 February 2022, we will be providing a 15% discount on estate planning packages for GESB Members. Contact us for further information and terms of this offer by calling us on 6381 9500.
TERMS OF DISCOUNT
- Subject to proof of GESB membership
- Quotes are tailored and will be given upon completion of an Estate Planning Instruction Form
- 15% discount is applicable only to a full estate planning package (Will, EPOA, EPOG and AHD + Super Advice)
- 15% is applied to the total invoice amount