Attorneys signing BDBNs – an unfortunate twist

Introduction

In our September 2018 bulletin we reported on the important Queensland Supreme Court case of Narumon which held that:

  • provided the trust deed does not preclude it, an attorney under an enduring power of attorney is able to affirm an existing binding death benefit nomination (BDBN) made by a fund member;
  • however, the ability for an attorney to sign a new BDBN is likely to require a conflict transaction authorisation provision in the EPOA to be effective.

In saying this, the Court held that there was nothing in the SIS Act which precluded an attorney from signing a BDBN on behalf of a member and went on to say that a BDBN was not a testamentary act.

Further confusion

Unfortunately though Narumon was considered recently by the West Australian Estate Administrative Tribunal. The Tribunal held that:

The making of a BDBN where the represented person has a beneficial interest in the fund the subject of the BDBN is a testamentary act or disposition“.

As a consequence of this, the West Australian Tribunal has said that an attorney is unable to make a BDBN.

Admittedly the West Australian Tribunal is a lower Court than the Queensland Supreme Court and much of the argument in the case concerned relevant provisions of the West Australian Guardianship & Administration Act.

Nevertheless, it does mean there is some degree of uncertainty as to whether an attorney can or cannot sign a BDBN. It follows that, in the absence of any further higher Court authority, the decision of the Queensland Supreme Court in Narumon is to be preferred.  Certainly carefully-drawn provisions in an enduring power of attorney document specifying appropriate powers (including a conflict authorisation if necessary) would be desirable.

2019-11-08T09:39:03+00:00November 7th, 2019|