Building an estate planning facilitation business around SMSFs
The recent NSW supreme court case of Walter William Nespolon-v- Lindy Van Camp is another case that identifies poor or inadequate estate planning resulting in litigation involving a blended family in conflict.
The recent NSW supreme court case of Walter William Nespolon-v- Lindy Van Camp is another case that identifies poor or inadequate estate planning resulting in litigation involving a blended family in conflict.
It is also another reminder of the significant opportunity for advisers to play a leading role in facilitating effective estate planning to their client base, particularly involving SMSFs, to avoid the costs of litigation and the resulting destruction of family relationships.
The case is still ongoing and involves, in part, a dispute over the distribution of approx. $4.4 of superannuation death benefits and an estate worth $8.1 million. The decease, Dr Harry Nespolon, died on 26 July 2020. He appointed his brother, his defacto spouse, Lindy van Camp and another as executors of his Will. He gave a right to reside in the house and the rest of the estate on a restricted testamentary trust in favour of Ms Van camp and her children. The Will contemplated that the super benefits would be paid to the estate, but it was apparent at the time the Will was made that no death benefit nomination was prepared. Dr Nespolon was suffering from terminal pancreatic cancer, and on the day of his death, Ms Van camp procured from Dr Nespolon a Binding death benefit nomination leaving all of his super death benefits to herself.
The case was an application for a judicial ruling as to whether the executors could challenge the death benefit nomination because the deceased lacked capacity due to the effect of the drugs he was on. It was also argued that the death benefit nomination was procured by Ms Van camp due to unconscionable conduct.
The result was that the court agreed that there was an arguable case, now signalling that a death benefit nomination could be challenged, like a Will, if the member lacked capacity or if was made at a point in time or manner that is unconscionable.
Most advisers undertake either the administration or investment of investments held in an SMSF. It puts them in a unique position to initiate and facilitate the payment of a client’s superannuation death benefits. The facts and circumstances of Nespolon exist in most adviser’s client base. The case could have been avoided if the adviser had developed a plan to manage Dr Nespolon’s superannuation benefits on death. At the very least, a properly documented death benefit nomination should have been prepared before his health declined, as well as a plan for adequate provision from the estate for his defacto spouse.
Inherit Australia exists to empower advisers to proactively pursue the best interests of their clients in the distribution of their wealth on death, that they have helped accumulate - and to be able to charge for it !