{"id":554,"date":"2018-10-10T08:00:44","date_gmt":"2018-10-09T22:00:44","guid":{"rendered":"http:\/\/dev2.e-cbd.com\/abkj\/articles\/?p=554"},"modified":"2018-10-03T13:50:38","modified_gmt":"2018-10-03T03:50:38","slug":"enduring-powers-attorney-binding-death-benefit-nominations","status":"publish","type":"post","link":"https:\/\/www.abkj.com.au\/articles\/enduring-powers-attorney-binding-death-benefit-nominations\/","title":{"rendered":"Enduring Powers Of Attorney And Binding Death Benefit Nominations"},"content":{"rendered":"

Within the legal profession, a question has often been asked that has had no clear answer – can an Enduring Power of Attorney extend a binding death benefit nomination for an incapacitated principal?\u00a0 In a recent decision of the Supreme Court of Queensland in Re Narumon Pty Ltd <\/em>[2018] QSC 185, this question was recently considered and a clear decision handed down.<\/p>\n

Background<\/h2>\n

The applicant, Narumon Pty Ltd, is the trustee of a self-managed superannuation fund established in 1992.\u00a0 The sole member of the fund was Mr John Giles who passed away in 2017, aged 80.\u00a0 Mr Giles was survived by his wife and a 16 year old son.\u00a0 He was also survived by 4 adult children from a previous marriage.<\/p>\n

Whilst the value of the estate was approximately $200,000.00, the benefits accrued by Mr Giles in his self-managed superannuation fund were significantly greater \u2013 valued at approximately $4 million.<\/p>\n

Mr Giles made 5 binding death benefit nominations between 2010 and 2013.\u00a0 In each nomination, Mrs Giles and their 16 year old son were the major beneficiaries.\u00a0 Indeed, the final nomination directed payment of 47.5% to Mrs Giles, 47.5% to his 16 year old son and the remaining 5% to his sister (the latter nomination was later held to be invalid as the sister was not considered to be a \u2018dependant\u2019 and therefore ineligible as a beneficiary).\u00a0 The notice stated that it would cease to have effect 3 years after it was signed, being 5 June 2016.<\/p>\n

In November 2013, Mr Giles lost capacity to make any health or financial decisions.<\/p>\n

On 16 March 2016, Mrs Giles and Mr Giles\u2019 sister, in their capacity as Enduring Powers of Attorney<\/a> for Mr Giles, signed an extension of his binding death benefit nomination.<\/p>\n

One of the questions before the Court was whether the Attorney\u2019s extension of the binding death benefit nomination was valid and binding.<\/p>\n

Judgment<\/h2>\n

Justice Bowskill held at [69] that the exercise of a right to extend a binding death benefit nomination fell within the meaning of a \u2018financial matter\u2019 under Schedule 2, Part 1 of the Powers of Attorney Act <\/em>1998 (Qld).\u00a0 Although not expressly included in the definition, a binding death benefit nomination nonetheless fell within the meaning of a \u2018financial matter\u2019 as it directed a trustee of a fund to pay benefits in a particular manner.<\/p>\n

The next issue which was considered was whether the Attorneys had the power to extend the binding death nomination.\u00a0 In considering this question, Bowskill J considered the terms of the Fund deed, the sections of the Powers of Attorney Act <\/em>1998 (Qld) and relevant provisions of the Superannuation Industry (Supervision) Act<\/em> 1993 (Cth).<\/p>\n

In considering the terms of the Fund deed, it was held at [59] that there was nothing in the deed which prohibited an Attorney from signing a nomination on behalf of a member.\u00a0 In fact, clause 5.4(b) expressly authorised an Attorney to make decisions on behalf of an incapacitated member provided such decisions fell within the scope of their power of appointment.<\/p>\n

At paragraph [60] of the Judgment, it was also held that the Commonwealth superannuation legislation did not restrict an Attorney from making a nomination as it was held that the terms of a Fund deed for a self-managed superannuation fund governed a member and not the Commonwealth legislation.\u00a0 As such, the Superannuation Industry (Supervision) Act<\/em> 1993 (Cth) did not apply in this instance and therefore did not prevent an Attorney from extending a nomination.<\/p>\n

At [81] to [85], Bowskill J also considered whether the nomination raised an issue of a conflict of interest between Mrs Giles as Attorney and Mrs Giles as beneficiary of the nomination.\u00a0 It was determined by her Honour that as Mr Giles had made a valid and effective nomination in 2013, and as the Attorneys were doing no more than confirming the existing nomination in order to ensure his wishes were respected, no conflict of interest arose.<\/p>\n

Decision<\/h2>\n

As the extension did no more than confirm the existing nomination made by Mr Giles himself in 2013, the extension of the binding death benefit nomination executed by Mrs Giles and his sister, as his Enduring Powers of Attorney, was held to be an effective binding nomination.<\/p>\n

In handing down her decision, Bowskill J highlighted a distinction between extending an existing nomination and creating a nomination for the first time, or purporting to amend or vary a nomination previously made by a member before a loss of capacity.\u00a0 In such instances, Bowskill J stated that different considerations will apply, including different considerations surrounding conflict of interest.<\/p>\n

Whilst the binding death benefit nomination was held to be valid in this instance, Re Narumon Pty Ltd <\/em>raises an important issue regarding Enduring Power of Attorney documents – depending on each person\u2019s individual circumstances, it may be necessary to expressly authorise or restrict an Enduring Power of Attorney from creating, extending or varying an existing binding death benefit nomination to ensure your wishes are respected.<\/p>\n

More Information<\/h3>\n

If you would like to read the full case of Re Narumon Pty Ltd <\/em>[2018] QSC 185, please click on the following link:<\/p>\n

https:\/\/archive.sclqld.org.au\/qjudgment\/2018\/QSC18-185.pdf<\/a><\/p>\n

Should you require further information, or wish to discuss your own Enduring Power of Attorney<\/a> and whether it meets your current needs, please contact ABKJ Lawyers<\/a> on (07) 55 323 199.<\/p>\n","protected":false},"excerpt":{"rendered":"

Within the legal profession, a question has often been asked that has had no clear answer – can an Enduring Power of Attorney extend a binding death benefit nomination for an incapacitated principal?\u00a0 In a recent decision of the Supreme Court of Queensland in Re Narumon Pty Ltd [2018] QSC 185, this question was recently considered and a clear decision handed down. Background The applicant, Narumon Pty Ltd, is the trustee of a self-managed superannuation fund established in 1992.\u00a0 The sole member of the fund was Mr John Giles who passed away in 2017, aged 80.\u00a0 Mr Giles was survived… Continue Reading<\/a><\/p>\n","protected":false},"author":1,"featured_media":557,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-554","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-wills-estate-law"],"yoast_head":"\nEnduring Powers Of Attorney & Binding Death Benefit Nominations<\/title>\n<meta name=\"description\" content=\"Can an Enduring Power of Attorney extend a binding death benefit nomination for an incapacitated principal? 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