“Although these cases involved non-SMSF superannuation funds, there's no reason to think the situation would have been different in the SMSF world. Basically, in the world of superannuation death benefits and intestacy, if someone dies, if they leave a widow or widower, even if they are a de facto, if the person dies without a will, the question is who is going to put up their hand and become the administrator of the intestate estate?”

If that person might also want to receive the superannuation personally, such as in the case of Burgess v Burgess, that would pose challenges based on the rulings.

“For example, in the Burgess case, Mr Burgess died leaving a widow. He had some young kids and Mrs Burgess put up her hand to become the administrator of the deceased estate,” Figot said.

“Mrs Burgess received the superannuation personally but had it gone to the estate, a portion of it would have had to have been held on trust by her for the benefit of her kids anyway. It's become very clear over a relatively short period of time, that if someone dies intestate, if a person puts up their hand to become the administrator of the intestate estate they must apply to get any superannuation.”

If the person acting as administrator is the surviving spouse, there may be a challenge if they receive any superannuation death benefits.

“A lot of these cases make clear that if someone dies intestate and hasn't made a BDBN, whoever is the administrator cannot receive superannuation personally. If they receive it personally, they might have to disgorge it to the estate,” Figot said.

Figot said in the case of McIntosh v McIntosh, the son James, who as an adult still lived with his mother due to various health reasons, and was in an interdependency relationship with her, died and his mother was appointed as administrator of his estate.

The superannuation fund paid the money to his mother, but his estranged father, who was a beneficiary under the intestate estate, claimed that it was a conflict of interest.

“The court ruled that the mother had to disgorge the superannuation benefits personally from the estate, which then had to be split equally between herself and her ex-husband,” Figot said.

“If it had gone to the estate originally, there would have been tax. The mother not only had to disgorge the money that she received tax-free, but because of that flow of money, and because she was in an interdependency relationship with her son, unfortunately she made it more tax-efficient for her ex-husband.”

Figot said as a result of these judgments, lawyers should “nudge” clients to make a will.

“And it shouldn’t be just the wealthy, older clients, but clients in their early 40s as well,” he said.

“Although as a lawyer you can’t tell people what to put in their will you can advise them and give them the information.”

He added that in Burgess v Burgess, the judge noted that the “unfortunate” circumstances could have been avoided if the deceased had done two things differently before his death.

“Firstly, make a will, then the undesirable scenario for his surviving family of dealing with the intestacy situation would have been avoided. Preferably, his will would have said in explicit terms that there was no difficulty for his widow if she was appointed as his executor in acting exclusively in her own interest in the event of his death,” Figot said.

“The judge also went on to say, ‘or alternatively make a binding death benefit domination’. I would say do both because, here we're talking about big super fund world and a BDBN only lasts for three years. Although everyone should remember to make a new BDBN every three years, they will forget. And at least a will can often last indefinitely.”