When death benefits are available to creditors of a bankrupt

When it comes to bankruptcy and superannuation, it is well established that a lump sum death benefit payment from a regulated super fund to a bankrupt is not available to creditors. The 2016 Federal Court decision of Trustees of the Property of Morris (Bankrupt) v Morris (Bankrupt) [2016] FCA 846 confirmed this.

In July of this year the Federal Court again looked at the issue of bankruptcy and superannuation death benefits, but from a different perspective.

In the case of Cunningham (Trustee) v Gapes, in the matter of Gapes (Bankrupt) [2017] FCA 787, the question asked of the Court was whether a death benefit which passed through the estate of a deceased, and was ultimately distributed to a bankrupt, was protected from creditors. The short answer – no. Read the rest of this entry »