proceedings, Walter William Nespolon v Lindy Van Camp [2022] NSWSC 1190 relates to binding death benefit nominations made on the date of a deceased person’s death.
DBA Attorney Special Counsel Bryce Figot said that in this particular case, the focus was on the trustee’s ability to defend claims regarding the validity of the BDBN and whether the costs could be paid out of the estate of the deceased and the superfund. explained.
Deceased Dr. Nespolon died on July 26, 2020, leaving behind his partner Lindy Van Camp and two daughters.
Dr. Nespolon’s Testament
Dr. Nespolon’s final will, dated July 23, 2020, named Mr. Van Camp, his brother Walter Nespolon, and Mr. James Dixon as executors.
The estimated value of the deceased’s estate is $8,145,269, with liabilities estimated at $3,554,075, giving a net worth of approximately $4,591,194.
Under Section 18 of his will, the deceased gave Mr. Van Camp his home furnishings, personal belongings and automobile.
Section 19 of the will gave Mr. Van Camp the right to live on land in Cremorne for the rest of his life.
Section 21 of the will states that the remainder of the deceased’s estate is to be settled under a testamentary trust in which the executor is the trustee and the principal beneficiaries are Ms. Van Camp and the children of Nespolon. said that Other beneficiaries include the children of Nespolon’s children, mothers of the deceased, trusts or institutions in which the beneficiaries are interested, and charities.
In article 33 of the will, the deceased expressed his wish to:
“If the primary beneficiary has not reached the retention age, maintain the capital of the fund as long as reasonably possible by the trustee (without limiting the trustee’s discretion) and limit the application of capital to the primary beneficiary. I wish for the medical and dental care, education (including vocational training), reasonable maintenance and welfare of the beneficiary.
In the will, the preservation age was set at 25 years old.
Sections 17 and 39 to 41 of the will intend that retirement pension or life insurance earnings may be paid to the estate of the deceased. Article 17 provides that such proceeds shall be used by the executor to pay any unpaid debts owed by the deceased as of the date of death (if the executor deems it necessary) and subsequently for the remainder of his estate. provided that it is retained to form a part. Such proceeds forming part of the remainder of the estate form part of the assets held under the terms of the testamentary trust above.
pension fund
Bellahealth was the trustee of the Nespolon Superannuation Fund. SMSF was established pursuant to a trust deed dated 5 February 2003, as amended by a deed dated 3 October 2012.
Pursuant to the Trust Deed (Amendment), the Fund’s assets are vested in the Trustees under the trust applied in the manner set out in the Fund’s Rules.
Pursuant to Rule 12.6, a member death benefit of approximately $4,401,422 (including life insurance) was paid out of the Fund upon the death of the deceased.
Related Provisions Rule 13.5(a):
“Death benefits may be paid in purchased annuities, annuities, or other periodic or lump sum payments, or any combination of such payment methods, as determined by the Trustee in its absolute discretion, either: shall be paid.
(i) to one or more named beneficiaries (if any) or other dependents of the Member in such proportions as the Trustee may determine in its absolute discretion;Also
(ii) to the member’s legal representative;
Rule 13.5(b) of the Rules Served:
“If the Trustee of the Fund, at the time of the member’s death, is in possession of a valid and effective binding Notice of Death Benefit Beneficiary Nomination (“BDBBN Notice”), the Trustee will Benefits must be paid to the named person.The beneficiary is mentioned in the BDBBN notice. ”
On the date of his death, the deceased executed a binding death benefit notice A form nominating Mr. Van Camp to receive all member death benefits payable from the fund in the event of the member’s death. The deceased has executed the form in his capacity as a member of the Foundation and sole director of VeraHealth.
Main proceedings
Nespolon and Dixon deny that the BDBN is valid and binding. They claim the deceased was incapable of comprehending the nomination at the time he signed it. He was given midazolam.
Ms. Van Camp has initiated proceedings (principal proceedings) seeking a declaration from the court that the nomination is valid and binding and an order that VeraHealth will pay her deceased alimony.
The referee’s defendants Vera Health, Nespolon and Dixon allege that Van Camp acted unfairly in obtaining the deceased’s signature on the death benefit application form, and the application could be revoked. claims that there is
One of the issues defendants relied on to support their contention of withdrawing the nomination for improper reasons is that the nomination was improvised. There are said to be insufficient funds in the estate to pay off the deceased’s debts and to satisfy what the defendant claims are the purposes of the deceased’s will.
Defendants allege that the purpose of the deceased’s will was to provide Ms. Van Camp and her daughters with housing and to protect his property for the benefit of his daughters in the long term.
In a cross-claim brought before the referee, the defendant seeks an order to withdraw the nomination or seeks a declaration that the nomination is void and unenforceable.
Advisory procedure
Mr. Nespolon, Mr. Dickson and Mr. Bellahealth have initiated proceedings seeking advice under Section 63 of the Act. Trustees Act 1925 For (NSW):
- Whether they are justified in defending Mr. Van Camp’s claims in the main proceedings.
- Whether it is justified to proceed with cross-claims in the main trial.When
- Whether you are entitled to defend Ms. Van Camp’s claims and to pay the costs incurred in proceeding with cross-claims in principal proceedings from the deceased’s estate and funds.
The court concluded that the Superfund Trustee was justified in defending Ms. Van Camp’s allegations and cross-claims.
It also determined that it was justified to defend those claims and pay the costs of prosecuting the cross-claims out of the funds’ assets.
Regarding this decision, Figot said it was an interesting case as he considered what a trustee or trustee company should do if a binding death benefit designation is not asserted to be valid. said it is.
“There have been other cases where the trustee said, ‘No, I don’t think this purported BDBN is valid. I had to,” Figot said ahead of a DBA Lawyers webinar on Friday.
“What is interesting here is that the trustee has taken the initiative to act in a candid and proper manner and has applied to the court to determine whether it can defend its claims as to whether the BDBN is valid.”
Figgot warned that trustees who do not apply for court guidance and go ahead and defend such claims can be in a very vulnerable position, especially if they lose.
The Supreme Court also noted the issue of costs.
“There is no suggestion that the deceased’s brother or Mr. Dixon are actually trying to make a profit. It just seems to be trying to best fulfill the wishes of the deceased,” he said.
The case also highlights the importance of pre-arranging real estate plans, Figgot stressed.
Mr Figgot said Hill v Zuda A binding death benefit nomination ensures that it can last three years or more if the trust deed allows it.
“When you can have an indefinite BDBN that’s valid for years and you have all these thorny questions about whether the person actually has the ability or not, the need to be nominated at the last minute at the hospital. No,” he said.
