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Recent court decisions clarify protection of death benefit payments to bankrupts

Publication date: 04 Sep 17 | Source: AUSTRALIAN TAX WEEK

Issue: Issue 35, 1 Sep 2017

Pages: pp. 3-4


Broadly, a member’s interests in a superannuation fund are fully protected upon bankruptcy. This protection even extends to lump sums being paid to the bankrupt.

A question that may arise is whether this would be true if the benefit being received by the bankrupt is in respect of someone who has died (eg, a death benefit being paid to the deceased’s member’s bankrupt spouse). Would those benefits be protected from creditors? This would have implications for estate planning where there is potential for a dependant to go bankrupt.

Two recent cases - Morris v Morris [2016] FCA 846; Cunningham v Gapes [2017] FCA 787, help answer this question.



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Author profiles

Christian PAKPAHAN
Christian is a Lawyer with DBA Lawyers.
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Bryce Figot CTA
Bryce is a Director at leading SMSF law firm DBA Lawyers. He practices predominantly in taxation and superannuation law, particularly the law of SMSFs. He is regularly quoted and published in the Australian Financial Review, the Herald Sun, CCH and LexisNexis publications, and elsewhere in the financial press. He presents extensively to accountants, financial planners and lawyers Australia-wide. Bryce has worked with DBA Lawyers since 2003. He holds both a bachelor degree and a masters degree in law and is an accredited Specialist SMSF Advisor. - Current at 10 December 2015
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