\u00a0Matthew Burgess, director of View Legal, said the case of Lin v Yim & Anor [2026] QSC 57 highlights the confusion that can often arise regarding whether superannuation benefits are an estate asset that can be dealt with under a will, particularly when held via a self managed superannuation fund.<\/p>\n
\u201cThis is often a point of confusion in holistic estate planning, particularly for advisers that do not specialise in the area,\u201d Burgess said.<\/p>\n
\u201cWhile superannuation benefits paid to a former member\u2019s legal personal representative do form part of the assets regulated by a will, this outcome is predicated on the trustee of the fund resolving to pay \u2013 or being bound to pay, due to a valid binding death benefit nomination \u2013 the benefits in this manner.\u201d<\/p>\n
Burgess said that well-drafted wills will often contain a provision to ensure superannuation benefits are dealt with in accordance with the will maker\u2019s wishes, such as\u00a0 \u201cIn the event that any superannuation benefits are paid to my executor as a result of my death, then I give \u2026\u201d.<\/p>\n
In Lin v Yim & Anor [2026] QSC 57, Burgess said the court heard the will included several such clauses including; \u201cI specifically direct that in the event that any potential beneficiary who is also an executor then they are not disqualified from being a beneficiary as a result of the exercise by them of their discretion\u201d.<\/p>\n
\u201cThe will also noted that \u2018superannuation benefits\u2019 means entitlements payable as a result of my membership of a superannuation fund and includes proceeds of any life insurance policies owned by the superannuation fund in respect of a life,\u201d he added.<\/p>\n
The case involved an estate valued in excess of $18 million including funds of around $5 million that had been withdrawn from an SMSF shortly before the death of the member, on advice from the accountants that by doing so this would ensure the benefits were tax free.<\/p>\n
\u201cThere seemed to be some question as to whether any of the member\u2019s family members would have met the definition of a dependant for tax purposes. If the member had no tax dependants and retained benefits within the SMSF at the date of death, this would have triggered a tax impost (essentially a form of death duty) on payment,\u201d Burgess said.<\/p>\n
\u201cOne aggrieved beneficiary instituted proceedings founded on an argument that the benefits paid prior to death retained their character as superannuation entitlements and therefore had to be treated in the manner mandated under the will.\u201d<\/p>\n
However, the court rejected this interpretation, Burgess said, and in its ruling stated that the above-mentioned clauses related to superannuation benefits not already paid out to the deceased which was the plain and ordinary meaning of the words in the will.<\/p>\n
\u00a0<\/p>\n
\u201cThe court stated that the use of the phrase \u2018in the event\u2019, given the word \u2018event\u2019 is ordinarily defined as \u2018a thing that happens or takes place\u2019, meant that the clause clearly contemplated the relevant event as requiring several things to occur before the clause would be engaged,\u201d he said.<\/p>\n
\u201cThese included that the superannuation benefits are paid to the executor as a result of the member\u2019s death. On this construction, as a question of fact, it was clear that the disputed moneys were not paid to the executor as a result of the deceased\u2019s death, given they were not paid to the executor, and they were paid before the death (see Fagan v Crimes Compensation Tribunal [1982] HCA 49).\u201d<\/p>\n
Burgess continued that the definition in the will of \u201csuperannuation benefits\u201d was crafted around the concept of \u201cpayable as a result of\u2019\u201dthe willmaker\u2019s death which meant the amount at the date of death must have been presently capable of being paid (see Glass v Defence Force Retirement & Death Benefits Authority [1982] FCA 558).<\/p>\n
\u201cAgain, here the benefits had been paid prior to the member\u2019s death. They were not payable at the time of death. There was nothing left of that character to pay, such that the funds in the personal bank account did not meet the definition of \u2018superannuation benefits\u2019 and in fact had lost that characteristic at the time they were paid to the deceased\u2019s personal bank account,\u201d he said.<\/p>\n
\u201cGiven the relevant clause used the words \u2018such superannuation benefits\u2019, as opposed to \u2018funds\u2019 or \u2018monies\u2019 then reference was required to the manner in which the will defined \u2018superannuation benefits\u2019. This meant the clause would only have been engaged where the deceased at the time of death still held entitlements in a superannuation fund as a member of the fund and the benefits were then paid to the executor by the SMSF as a result of the death \u2013 none of which had occurred here.\u201d<\/p>\n
Furthermore, he said, nothing in the wording in the will supported an argument that the clause was so broad to include funds removed from the SMSF prior to death and held in the deceased\u2019s personal account.<\/p>\n
\u201cIndeed, even if it could have been said that there was some form of constructive payment to the executors, the two other pre-conditions in the will had clearly not been met,\u201d he added.<\/p>\n
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