In our exploration of estate planning this month, we’ve delved into a topic that often doesn’t get the attention it deserves: simultaneous deaths. While such events are rare, it’s essential to understand the potential implications, especially when it comes to beneficiary nominations, both within and outside of superannuation.
When two or more individuals pass away simultaneously, the order of their deaths becomes critical in determining the distribution of assets, particularly for jointly held property and a deceased estate’s assets. State and territory laws in Australia address this, with rules varying depending on the context—jointly owned property, wills, or intestacy.
For jointly owned property, the general principle is that the younger person is presumed to have survived the elder. However, laws in each jurisdiction, such as New South Wales, Queensland, Victoria, Tasmania, and the Northern Territory, may have nuanced differences. Western Australia’s legislation provides for a devolution of jointly owned property as if the individuals died as tenants in common in equal shares.
In estate planning Will’s typically presum that the older person died first in the event of simultaneous deaths. However, this presumption can be altered by a valid will specifying a survivorship timeframe, often set at 30 days. This provision helps avoid uncertainties in the order of death, streamlining the distribution process.
Regarding superannuation, the regulatory landscape is silent on simultaneous deaths. The Superannuation Industry (Supervision) Act 1993 and Regulations 1994 outline eligible beneficiaries, but the treatment of simultaneous deaths is left to the respective super fund’s governing rules. For APRA-regulated funds (e.g. public offer and industry super), binding death benefit nominations (BDBN) are common, but in the case of simultaneous deaths, these nominations may be invalid. Trustees must follow the governing rules, potentially paying the benefit to a living dependant or the deceased member’s legal personal representative (LPR).
The death benefit payment options are more flexible in self-managed super funds (SMSFs) and small APRA funds (SAFs). Along with state and territory laws, survivor provisions can be included in BDBNs, allowing for a preferred survival timeframe. SMSF trustees can incorporate specific death benefit payment rules into the fund’s trust deed, providing even greater certainty.
Life insurance, governed by legislation like the Life Insurance Act 1995, introduces additional considerations. Insurers may have varied approaches to the payment of benefits to predeceased beneficiaries. While some may treat the nomination of a deceased beneficiary as invalid, others may pay the benefit to the beneficiary’s Legal Personal Representative (LPR).
In summary, though rare, the complexities of simultaneous deaths underscore the importance of thoughtful estate planning. Your advisors should guide you on structuring beneficiary nominations to align with yes testamentary wishes, considering the specific rules and provisions applicable to your circumstances.
If you have any questions or concerns about your estate plan, including simultaneous death scenarios, feel free to contact our legal expert, Kerri Tucker, at email@example.com.