Include super death benefits in estates – Law Council
The Federal Government is being urged to use the May Budget to simplify the superannuation death benefit framework making superannuation death benefits part of a deceased estate.
The Law Council of Australia has used its pre-Budget submission to urge the change, arguing that it would provide greater certainty and autonomy for superannuation fund members.
It said that superannuation fund entitlements represented one of the largest assts owned by most Australians upon their retirement, but when a fund member died before receiving their entitlement the law was not settled.
“The law is not settled in regard to superannuation death benefits should be disposed and there is significant complexity and ambiguity about the effect of such nominations in a range of different circumstances,” the Law council said.
It pointed out that the Australian Law Reform Commission (ALRC) had recommended a review be conducted by Treasury in 2017 to address complexities and ambiguities.
“As noted by the ALRC, the ability to make a binding death benefit nomination is a key aspect of advance planning, and clarity around the process for making these nominations will assist to provide autonomy to older persons and reduce the risk of elder abuse,” the submission said.
“The Law Council has recently written to the Treasurer and the Assistant Treasurer repeating its calls for the Australian Government to investigate reform to the regulatory framework in relation to superannuation death benefit nominations.”
“The Law Council considers that the superannuation death benefit framework should be simplified and improved by amending the SIS Act to require all superannuation death benefits to form part of the estate of a deceased person, except where that person has made a binding death benefit nomination. In the Law Council’s view this reform would provide greater certainty and autonomy for all members of superannuation funds in their succession planning, is consistent with key rule of law principles, and would significantly reduce delays in the provision of superannuation death benefits.”