Why Beneficiary nominations are SO important!

A recent case from the Supreme Court of South Australia, involving Both Mr Hassan and his wife, who were the only members and also trustees of their Self Managed Super Fund (SMSF) shows the importance of advisers in planning for your beneficiaries.

This case, as you will see, highlights the need for detailed advice, both with the estate planning lawyer and a life insurance adviser experienced in estate planning.

The case involves Morris Hassan, who was married to his second wife Margaret Hassan and had children from his previous marriage.

Before Mr Hassan died, he made a document stating that he wanted his super to be split between his children and second wife exclusively.

On face value, the document seemed to be a binding one, and was signed by two witnesses.

Unfortunately, when Mr Hassan died that document was brought into question, as Mrs Hassan did not believe she had to pay the children their third share (legally). It seems her relationship with the children was not as close as his.

Mrs Hassan argued that the document was not a binding nomination form that aligned itself with the current trust deed.

All parties went to the Supreme Court, which haven’t publicised the outcome, but there are some key lessons learned from this story:

1)   The trust deed was written without a strategic plan in place. It was a general trust deed and did not take into account ‘other’ documents that outlined the wishes of the deceased.

2)   Selecting the right person to control the super fund in the event of death or disability.

3)   Have the right life insurance adviser in place to ensure benefits are distributed in line with the trustee and your particular plan.

The moral of the story is that if you have an SMSF and/or you are part of a ‘blended’ family, please make sure you speak to a solicitor who is experienced in estate planning law.

To speak with a trusted adviser call 1800 674 435 or EMAIL US