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Estate Planning

Tuesday, February 20, 2018

Can an attorney under an EPOA make a Binding Death Benefit Nomination?
Our last article explained what EPOA’s and BDBN’s are and their legal effect.
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.