Superannuation

A recent Federal Court case (Steele v Host-Plus Pty Limited as trustee for the Hostplus Superannuation Fund [2025] FCA 668 (20 June 2025)) offers a clear reminder that when it comes to your superannuation, your intentions alone aren’t always enough to avoid conflict after you're gone — especially in blended family situations.

Michael Steele, son of deceased Hostplus member Jennifer Cole, challenged the fund’s decision to pay her superannuation balance to her spouse, Stephen Cole. Steele argued that as Jennifer’s biological child, he had a reasonable expectation of receiving at least part of her super. But both the Australian Financial Complaints Authority (AFCA) and the Federal Court found that Hostplus had acted reasonably in paying the benefit to her spouse.

Why did the fund make that decision?

Because in 2005, Jennifer Cole had nominated Stephen as her preferred beneficiary — a non-binding nomination, but one the fund considered alongside other evidence. Importantly, her will (made the same month) also left everything to Stephen. There was no indication that Steele or his sister were financially dependent on her at the time of her death in 2021. The fund’s decision, though painful for the children, was likely consistent with Jennifer's longstanding intentions.

The key takeaway? Intentions are not enough unless they are properly documented and structured.

Here’s what this case teaches us:

1. Superannuation is not automatically controlled by your will.

Unless you make a binding death benefit nomination, your super fund has the discretion to decide who receives your super when you die. A non-binding nomination is simply a suggestion — the trustee will consider it but is not bound by it.

2. Blended families need more than simple wills.

Even if you have a will leaving everything to your spouse, there’s no guarantee that they will pass anything on to your children after your death. Mirror wills can be changed after the first partner dies. In this case, Steele claimed Stephen Cole changed his will after Jennifer’s death to favour his own biological children.

That may feel unfair — but it’s perfectly legal.

3. Clear structures prevent future conflict.

If you want to benefit both your spouse and your children, you need to plan for that in your estate documents. Tools such as testamentary trusts, life interests, and binding nominations can help achieve a balance and protect everyone’s interests.

The bottom line: the best time to get your affairs in order is now, while you’re well and able to make your wishes crystal clear. If you’ve got a blended family, or if you’re relying on informal understandings, it’s time to make those intentions legally binding.

Need help putting the right structures in place? Get in touch so we can discuss what will work best for you.