Last Friday, Bowskill J of the Queensland Supreme Court held that a binding death benefit nomination (BDBN) made by attorneys was valid, in circumstances where the BDBN was confirming a nomination previously made by the principal.

The judgment is very well reasoned and a relatively easy read.

CAUTION – this case should not be treated as authority for the proposition that an attorney has authority to sign a BDBN on behalf of a principal.  In fact, some comments made by her Honour would indicate the opposite.  She found that, in the BDBN in question, because the attorneys were only confirming the principal’s previously expressed wishes, there was no conflict transaction in the circumstances of this case.   But her Honour went on to say (at [90]):

“Although [it was] submitted that … a conflict transaction … would not be invalid, but rather expose the attorney to personal liability for compensation, I do not accept that.  In my view execution of a death benefit nomination by an attorney, in circumstances of actual or potential conflict contrary to s 73, in the absence of authorisation from the principal, could result in a declaration of invalidity of the nomination.  If in doubt, an attorney could prospectively approach the court for directions, under s 118.”

Therefore each case will need to be considered on its own facts.

From an estate planning perspective, specific conflict clauses are essential; and great care should be taken if making a fresh nomination in circumstances where either the principal has never made one, or it is different to a previous nomination of the principal.

Read Re Narumon Pty Ltd [2018] QSC 185 here.

One thought on “Court confirms attorney can make BDBN

  1. What it certainly does confirm Caite is that a lapsing BDBN is no longer the death nail to a member’s wishes, so long as they have a EPOA in place and the attorneys are just reaffirming.
    Certainly no substitute for proper estate planning

    Liked by 1 person

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