The death of a 23 year-old is a tragic reminder to review your death benefit nominations with your superannuation trustee to make sure that nomination is valid and current.
Ashleigh Petrie, a 23 year old court clerk, was in a relationship with Magistrate Rodney Higgins. Higgins, who was 68 at the time had been in a relationship with Petrie for approximately seven months, with the couple living together for four of those months. Petrie and Higgins got engaged but tragically Petrie died three weeks later. Prior to her death, Petrie had nominated her mother to receive the proceeds of her $180,000 superannuation benefit. Despite the nomination, Rest Super identified that Higgins was her de facto partner (deeming him a dependant), making him a person eligible to claim the super funds. While the details are murky as to the exact nature of Petrie’s nomination, the assumption is that the nomination was either non-binding or invalid. The decision has sparked outrage as Petrie’s mother has experienced financial hardship, reportedly often relying on money provided by Petrie, while Magistrate Higgins reportedly earns a salary of more than $300,000 per year. The decision is currently being appealed to the Australian Financial Complaints Authority.
What can be taken away from this situation?
The death of Ashleigh Petrie is a tragic reminder of the importance of understanding that your superannuation is dealt with separately to your will and different rules apply. To ensure that your super is dealt with in accordance with your wishes, you can make:
- a non-binding nomination; or
- a binding nomination; or
- a non-lapsing nomination.
A non-binding nomination is as the name suggests, non-binding. It is an expression of your wishes and will guide how your superannuation is distributed however does not guarantee that your wishes will be followed.
A binding nomination, usually lasts for 3 years. Provided the binding nomination nominates a valid person, a dependent or legal personal representative, and is current at the time of your death, it will be binding upon the trustee of your super fund. A dependant can include your spouse, your child or a person with who you have an interdependency relationship. An interdependency relationship means that you have a close personal relationship AND live together AND one or both of you provide the other with financial support AND one or both of you provide the other with domestic support and personal care. A legal personal representative means the executor of your will or administrator of your estate or the trustee of the estate of a person under a legal disability.
Some super funds permit the creation of a non-lapsing nomination. The extra conditions of creating a valid non-lapsing nomination will vary between super funds, however all non-lapsing nominations will require that you nominate either a dependent or legal personal representative. A dependant can include your spouse, your child or a person with who you have an interdependency relationship. An interdependency relationship means that you have a close personal relationship AND live together AND one or both of you provide the other with financial support AND one or both of you provide the other with domestic support and personal care.
For more specific information contact your super fund directly as the exact requirements of nominations will vary . However, it is important that you make a nomination and ensure that you keep the nomination effective and up to date as your circumstances change. Contact us for any specific questions relating to your estate planning.