Bad Night? Bad Romance? Bad Super Binding Death Nomination?

Can I break up with my de facto via SMS?

When it came to $1,120,000 from a Super Binding Death Nomination, either way the court has said, ‘you can't end a de facto relationship over a TXT message' (sent to your sister)’.

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Can you end a de facto relationship by sending a TXT for a super Binding Nomination?

Well first of all this begs the question, Whose your Super Beneficiary?

In a recent Full Federal Court case on appeal (Nguyen v Australian Financial Complaints Authority [2024] FCAFC 77), the Court ruled that a text message alone was insufficient to terminate a de facto relationship immediately before the sender’s death.

What you need to know first to understand this sad and unusual situation

1. The vast majority of Australians have Super or an SMSF
2. You can have a Life & Disability Insurance premiums paid from your super fund
3. You can make a written Binding Death Nomination and make your wishes clear to the Trustee of the Super Fund, who they must pay your super fund balance to, upon your death.

What happened

Mr Corbisiero, who died by suicide, had superannuation entitlements of $1,120,000 as at the date of his death.

• Prior to his death, he had made a binding death nomination in favour of his then de facto partner, Mr Nguyen, directing the trustee of the super fund to pay 100% of his entitlement to Mr Nguyen, in the event of his death.
• Shortly before his death, Mr Corbisiero sent a txt message to his sister via Whats App, stating his wishes.
• This txt message raised a legal question about whether the binding superannuation nomination should still be honoured, leading to a legal dispute over the intended recipient of the death benefit.

Toxicology reports revealed that at the time of sending the text message and at his death, Pino Corbisiero had both cocaine and alcohol in his system.

The message stated (errors original) below:

Was this TXT sufficient to indicate a relationship break up?

In this case, the only conduct to end the relationship, was the text message sent by the deceased to his sister stating his intention to take his own life.

The appeals court found, this was held not to be conduct sufficient to terminate the de facto relationship between Mr Nguyen and Mr Corbisiero, and therefore the Court found that Mr Corbisiero had not actually taken steps to end his relationship with Mr Nguyen, prior to his death.

The outcome

As the text message was insufficient in ending the relationship, Mr Nguyen was the deceased's spouse as at the date of his death, the non-lapsing binding nomination in favour of Mr Nguyen was valid and consequently, the court affirmed the deceased’s de facto partner was entitled to the death benefit payment. (See SIS regulation 6.21(2A))

The Federal Court ruled in favour of Mr Nguyen, stating he was entitled to the benefit because he and Corbisiero were living together, when the deceased passed away.

“In my view, the textual link between entering into and terminating a de-facto relationship is clear. It is coincident with commencing to live with a person on a genuine domestic basis in a relationship as a couple and ceasing to do so. ... Where, however, there is no such communication, there must, I think, be some other conduct that is apt to stand as a practical manifestation of the intention so formed. A person who tells a third party of his or her intention to end a de facto relationship should not be understood, merely by that communication, to have done so. In my view, termination requires some other conduct inconsistent with the continuation of the relationship…" Justice Snaden

De facto relationships and their Binding Death Benefits can be equally complicated

This appeal courts decision highlights not only the importance of clear demonstrable acts, regarding the status of the de facto relationship at the time of death, particularly as it relates to superannuation benefits, but also as a reminder that as Australians super fund balances increase, so will the parties who may seek access to them.

The Federal Court ruled in favor of Nguyen, stating he was entitled to the benefit because he and Corbisiero were living together when the deceased passed away.

Make your intentions very clear, keep your death benefit nominations up to date make sure your financial advisor knows where your Will document, is and what are your written Super Beneficiary nomination instructions.

Drew Browne is a specialty Financial Risk Advisor working with Small Business Owners & their Families, Dual Income Professional Couples, and diverse families. He's an award-winning writer, speaker, financial adviser and business strategy mentor. His business Sapience Financial Group is committed to using business solutions for good in the community. In 2015 he was certified as a B Corp., and in 2017 was recognised in the inaugural Australian National Businesses of Tomorrow Awards. Today he advises Small Business Owners and their families, on how to protect themselves, from their businesses.  He writes for successful Small Business Owners and Industry publications. You can read his Modern Small Business Leadership Blog here. You can connect with him on LinkedIn.  Any information provided is general advice only and we have not considered your personal circumstances. Before making any decision on the basis of this advice you should consider if the advice is appropriate for you based on your particular circumstance.