By and -


  • In the recent decision of G v G (No. 2) [2020] NSWSC 818, the NSW Supreme Court held that the binding death benefit nomination that was made by financial managers for a protected person was void.
  • The decision casts new doubt over the ability of an enduring attorney to make a binding death benefit nomination for a principal.

It is clear that an attorney or financial manager cannot make a will for an incapable person, but there has been considerable uncertainty around whether they can make a binding superannuation death benefit nomination (‘BDBN’). In Tasmania, the issue has been clarified for attorneys by s 31(2A)(i) of the Powers of Attorney Act 2000 (Tas) which specifies that an attorney may exercise any power in respect of superannuation. In other jurisdictions, including NSW, the legislation is silent and we must look to the case law for guidance on this question.

The question has been considered in Queensland in Re Narumon Pty Ltd [2018] QSC 185 and in Re SB; Ex parte AC [2020] QSC 139. In both cases, the Court held the making of a BDBN was not a testamentary act and can be done by an attorney or administrator (in NSW, a financial manager) as long as it is not otherwise prohibited, e.g. as a conflict transaction. In Western Australia, by contrast, the State Administrative Tribunal reached the opposite conclusion in SM [2019] WASAT 22, holding that the making of a BDBN is a testamentary act, not within the proper functions of an administrator. The NSW Supreme Court recently considered the issue in G v G (No. 2) [2020] NSWSC 818 (‘G v G’).

The facts in G v G

G’s father and sister were the financial managers of G’s protected estate, which was in the order of $15 million with about $10 million held in a retail superannuation fund. The financial managers sought orders confirming the NSW Trustee & Guardian had power to authorise the investment in the retail superannuation fund. Doubts about that power arose from observations made in Perpetual Trustee Company Limited v Cheyne [2011] WASC 225 that suggested that a payment by a trustee into a superannuation fund was not an ‘investment’ of trust property by the trustee because, by the payment into the fund, the trustee divested itself of trust property, lost control of that property, and put the property beyond the protective control of the Court. However, the position was far from certain because in other jurisdictions a trustee was found liable for failing to consider the action that the WA Court decided the trustee couldn’t undertake. The financial managers also sought an order that they be excused by the Court for any breach of duty as a result of transferring funds into superannuation, and as a result of their execution of BDBNs in favour of G’s deceased estate.

The decision and reasoning in G v G

The Supreme Court (Lindsay J) was satisfied that the NSW Trustee & Guardian had power to authorise the investment of G’s protected estate, in whole or in part, into regulated superannuation funds. However, the Court decided that neither the power to invest, nor any authorisation granted by NSW Trustee, extended to making a nomination for payment of a death benefit, binding or otherwise. The Court stated that ‘the vice in a death benefit nomination made by a protected estate manager is the possibility that the manager might induce the trustee of a superannuation fund to make a payment from the fund otherwise than to the deceased estate of the protected person’ (at [45]).

You've reached the end of this article preview

There's more to read! Subscribe to LSJ today to access the rest of our updates, articles and multimedia content.

Subscribe to LSJ

Already an LSJ subscriber or Law Society member? Sign in to read the rest of the article.

Sign in to read more