Written

For

The

Australian

-

Son

loses

mother’s

super

to

stepfather

despite

court

challenge

Here's a case that should make every blended family sit up and take notice. A son challenged his stepfather all the way to the Federal Court over his late mother's Hostplus super balance — and lost. Twice.

The case of Michael Steele versus his stepfather Stephen Cole is a textbook example of what can go wrong when you assume superannuation will flow to your kids automatically. It won't.

Here's what happened. Jennifer Cole passed away in 2021. Back in 2005, she'd made a will leaving everything to her husband Stephen and phoned Hostplus to nominate him as her preferred beneficiary. That nomination wasn't binding, but 16 years later, Hostplus still weighed it heavily. AFCA agreed the decision was "fair and reasonable." The Federal Court agreed too.

The kicker? Steele claims his mother and stepfather had mirrored wills — leaving assets to each other with the intention it would eventually flow to all children. But after Jennifer died, Stephen allegedly changed his will to favour his own biological children. Legally, he was well within his rights to do so.

This is the trap I see repeatedly with second marriages. Mirrored wills feel equitable while both partners are alive, but the moment one dies, the survivor can rewrite the rules entirely. The children of the first-to-die can be completely cut out.

Two takeaways from me. First, don't rely on your spouse's will to protect your children's inheritance. Leave assets directly to your kids through your own will, or look at life interests and testamentary trusts. Second, if you want your super to go to your children, get a binding death benefit nomination in place — and keep it current. Without one, the fund has discretion, and as this case shows, discretion doesn't always land where you'd expect.

The cost of getting this wrong isn't just financial. It's years of court battles and fractured families.