Search This Blog

Sunday, 11 June 2017




Can an attorney under an EPOA make a Binding Death Benefit Nomination?
Our last newsletter explained what EPOA’s and BDBN’s are and their legal effect. Didn’t receive our last newsletter? Contact us and we’ll send our last edition to you personally.

Quick re-cap
An Enduring Power of Attorney (“EPOA”) is a legal document which grants a person (the “Attorney”) the power to make important decisions for another person (the “Principal”) in the event the Principal loses the mental capacity to make their own decisions.

A Binding Death Benefit Nomination (“BDBN”) is an instruction given to a superannuation fund to pay all monies held by them on your behalf to your nominated beneficiaries.

The question
What happens if the Principal has lost capacity and cannot make or renew a BDBN, or more specifically: Can the holder of an Enduring Power of Attorney make a BDBN?

A BDBN is not a document which must be executed by a person personally, as is the case with Wills and Transfers of real property. An Attorney under an EPOA can make, confirm and even amend or revoke a BDBN for the Principal, particularly if there is an express power in the EPOA authorising them to do so.

An Attorney has the power to change the beneficiaries who receive your superannuation on your passing. When creating their Will, most people will assume that the money they have in superannuation will be available to the estate. The Will is then made having regards to the size of the estate.

For example, a person who has $500,000 in superannuation and another $500,000 in real estate and personal property might expect to have approximately $1Million to dispense with under their Will (assume they have used a BDBN to have 100% of their super paid into their estate). That person might provide in their will for payments to their spouse, children, charity or other persons based on that figure of $1Million. If the Attorney amends the BDBN so that the money isn’t paid into the estate, their won’t be enough money in the estate to provide for the spouse, children or charity under the Will, and the provisions of the Will are rendered incapable of completion.


The question highlights the importance of ensuring that any Attorney you choose to appoint is one you hold the highest trust in.

Tuesday, 9 May 2017




Enduring Power of Attorney
An Enduring Power of Attorney (“EPOA”) is a legal document which grants a person (the “Attorney”) the power to make important decisions for another person (the “Principal”) in the event the Principal loses the mental capacity to make their own decisions.

The EPOA must be signed by both the Attorney and Principal while the Principal still has capacity otherwise the document will be void. The EPOA only activates, that is to say it only confers power on the Attorney, once the Principal loses capacity. The EPOA must specify what matters the Attorney can make decisions about. The most common examples are health, personal and financial decisions however the documents are usually drafted broadly enough to cover almost any type of decision the Attorney may need to make for the Principal.

Binding Death Benefit Nomination
Most people are surprised when we tell them that their superannuation does not automatically form part of their estate when they die.

The superannuation funds each have their own rules but typically the decision of who to pay your funds to when you die falls into the hands of your super fund. The fund can choose to pay your children in disproportionate amounts, at different times or not at all, in any manner which the super fund chooses.

A Binding Death Benefit Nomination (“BDBN”) is an instruction given to a superannuation fund to pay all monies held by them on your behalf to your nominated beneficiaries. You are free to nominate your own beneficiaries rather than rely on the superannuation fund’s definition. You can also nominate your estate as a beneficiary itself so that your money goes into your estate to dispense with under your Will. The super fund is required to follow the instructions in the BDBN upon your passing.  There is a catch though:  your BDBN lapses every three years and must be renewed. 

Tuesday, 18 April 2017

Extensions

What happens in a conveyance when one party needs an extension?



Times and dates in Australian contracts are very important. Missing a deadline can have serious implications. The standard REIQ contract, and most other types of contracts entered into in Australia for that matter, will contain a phrase to the effect of:

Time is of the essence”.

Those words carry greater significance than most people know. The legal effect of those words is that if, for any reason, something ought to be done by a specific date and/or time, and that thing is not done before that date/time, then the party who fails to do the thing is in breach of the contract.

We see this in conveyances most typically where settlement must occur on a certain date. As a common, practical example: if one party is late to settlement and arrives after this time then the other party may be entitled to terminate the contract.

This doesn’t just apply to the date and time for settlement but includes all dates and times in the contract such as; finance conditions, building and pest, sunset clauses, and so on.
In order to avoid breaching the contract parties will often seek an extension. An extension is a variation of the contract and therefore as a rule of law it must be in writing and signed by the parties (or their solicitors).

Neither party is entitled to an extension. Requests for extensions can, and often are, refused.

It is common for the party from whom an extension is sought to place conditions on their agreement to extend, for example, that the other party pay their additional legal costs, pay default interest, or forfeit certain rights under the contract. 

Search This Blog