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Many will be familiar with binding death benefit nominations for their superannuation funds. These nominations direct the trustee of the fund to pay the benefit upon a member’s death in a particular way (generally to “dependants” in particular proportions, or to the legal personal representative (executor of the will or trustee of the estate) of the member. In the absence of the binding death nominations, it is for the trustee to decide which dependants are to receive the benefit, and in what order. Under the superannuation legislation, there are particular requirements for valid nominations, eg, they require two independent witnesses, and unless authorised by the superannuation trust deed to be non-lapsing, they will lapse after 3 years. The importance of this is that if a nomination is not done correctly, it does not bind the trustee who will then usually consider competing claims of dependents, whether or not that represents the wishes of the member. So first it is critical when estate planning to get the the nominations right, it is also critical to ensure that the they conform with the trust deed for the fund (you’d be surprised at how often they do not, and often even the form attached to the trust deed does not conform to the wording of the trust deed). With superannuation often forming a large part of the wealth distributed on a person’s death, the nominations are often challenged. As an example, let’s say that Joe dies. He has a child to his first marriage, now 25 years old, and has left a $1M superannuation benefit with a binding nomination to that child. His second wife and the child don’t get along. Under his will she gets his estate which is his home worth $1M, and $100K in the bank. If the nomination is valid, that is how the estate will be distributed. If it isn’t, then his new wife can press for part or all of the superannuation death benefit. If it was paid into his estate, then she would receive all of it, and the child would miss out entirely. A number of challenges to binding nominations are whether they comply with particular provisions in the superannuation regulations, reg 6.17A which sets out formal requirements. The High Court has recently confirmed that it does not apply to self managed superannuation funds. This means that for industry funds, it is critical that the nominations comply with the trust deed and regulation 6.17A. For a SMSF, the nomination does not have to comply with reg 6.17A save to the extent that the trust deed requires, but it has to comply with the fund deed. For advice in relation to wills and estates, contact Jessica Murray (jessicam@qbmlaw.com.au) or Peter Muller (peterm@qbmlaw.com.au).

The Supreme Court of Queensland has twice recently considered the implications of the “gift and loan back strategy” which is a common device whereby a person makes a gift of a substantial amount of money to a trust, which gift is made through a loan from the trust, and secured against the assets of the gift maker.  The transaction sets out to achieve the reduction of the equity that the gift maker has in their own assets, with the corresponding increase in the equity owned by the trustee of the trust, for the trust.  Generally, this device is used in asset protection strategies, but also it has been used to reduce the equity of a person in their own assets as part of estate planning, with a view to reducing the overall size of an estate capable of being fought over in family provision claims which are made under the Succession Act – for example, when the Will maker wants to give all of their assets to one child and not another. The underlying intention is to reduce the amount of the estate available for claims to be made. Such a strategy was considered in the matter of re: Permewan, first in May 2021 and second in June 2022.  The first decision related to an application to remove the executor so that an independent person could be appointed to investigate whether the gift and loan back strategy was a sham and should be set aside as not being binding on the estate (which would have the result that the estate would be larger, and then the disappointed potential beneficiaries would potentially share in the larger estate when making claims for further provision).  Orders were made in that application for the removal of the executor and the appointment of an independent person as administrator to the estate to allow for the investigation of the dealings. Subsequently, there was litigation over the validity of the documents comprising the gift and loan back strategy.  Ultimately, the parties agreed that due to a deficiency in the way in which the transaction was carried out, it should be set aside.  That said, the question of the merits of the strategy itself was considered in relation to an argument over costs and His Honour Cooper J gave a detailed judgment delivered on 10 June 2022 considering the merits of the transaction in the context of whether or not costs should be ordered.  His Honour found that – As a consequence of these matters, there is potential that attempts to manage family provision claims by reducing the size of the estate through the use of a gift and loan back strategy will be attacked and potentially set aside, with significant cost risks to any party seeking to enforce it.  For advice regarding estate planning, please contact Peter Muller at peterm@qbmlaw.com.au or Jessica Murray jessicam@qbmlaw.com.au

The short answer is no, a person can prepare their own Will, but it is not always a good thing to try to do it yourself.  There are many things which can go wrong if the Will is not properly drawn up, for example, by not satisfying the formal requirements for Wills or leaving partial intestacies (ie where part of the estate is not dealt with).  Another common mistake is to include in Wills things that are not capable of being given by a Will (for example, assets owned by a company or held in a trust).  Some of those things were considered in the recent decision of Re: Jacob Albert Omerod (deceased) [2022] QSC 98.  This matter involved a “home made” Will which was not properly executed and which left a partial intestacy.  As a result, an application was needed to be made to the Supreme Court for orders dispensing with the execution requirements for the Will, under section 18 of the Succession Act 1981.  Briefly, the formal parts for execution of a Will are set out in section 10 of the Succession Act, providing that the Will must be: In writing; Signed by the Will maker or someone else in the presence of and at the direction of the Will maker; Signed in the presence of two or more witnesses present at the same time; Signed by the Will maker with the intention of executing the Will. Commonly with home made Wills, there are deficiencies in some shape or form with the execution of the document.  In the matter referred to, the deficiency was that the Will maker had not signed the Will, even though it had been witnessed.  Section 18 allows the court – if it is satisfied that the person intended it to be their Will (or an alternation) to dispense with one or more of the formal requirements.  In the matter referred to, the court was satisfied that the Will maker intended the Will to take effect as his last Will based on the evidence of its creation and its signing by the witnesses. While it is good that these things can often be cured, the costs involved in rectifying these matters are quite significant.  The evidence to be put before the court can be quite extensive depending on the circumstances, and it is possible that the costs involved would be well in excess of $10,000 in even a relatively simply matter, and potentially many times that amount if it is contested.  As a result, while it is possible for a person to draw and have properly signed their own Will, attempting to do so can lead to serious defects not only in the terms of the Will putting into effect their wishes, but also in respect of its execution. For all enquiries in relation to Wills and estate planning, please contact Peter Muller at peterm@qbmlaw.com.au or Jessica Murray jessicam@qbmlaw.com.au

Often people will see a builder or architect, go through various revisions of plans, then end up with another builder or architect. This can result in claims for compensation for breach of copyright. The Queensland District Court recently considered those matters in claims against a builder and home owner. Worth a read if you are thinking of doing it https://archive.sclqld.org.au/qjudgment/2022/QDC22-116.pdf