Estates and legal interaction with superannuation funds.
James McIntosh had no will when he was killed aged 41. He had no wife or children. He lived with his mother at the time of his death and had for some time. He had money in superannuation funds and had made a non-binding nomination leaving it all to his mother.
Upon his death, his mother applied to be made administrator of his estate and was appointed by a court. An administrator has fiduciary duties toward the estate at the expense of her own interests. She stated in an affidavit that she understood that, if she were so appointed, she was required to collect her son’s assets and distribute his estate by dividing them equally between herself and the father. She said ‘I propose faithfully to do this.’ This required her to apply the rules of intestacy to the estate and it would be divided equally between her and her former husband.
Most of the estate assets were the superannuation benefits. His mother applied as a beneficiary to have it all paid to her. The husband objected to the court saying that the superannuation fund should form part of the estate and the mother should have brought into the estate for division so that he would receive half.
The court agreed … “there was a clear conflict of duty … contrary to her fiduciary duties as administrator…. and she was preferring her own interests to her duty as a legal personal representative to make an application for the funds to be paid to her as a legal personal representative. She was in a situation of conflict which she resolved in favor of her own interests. As such, she acted … in breach of her fiduciary duty as administrator of the estate …
Accordingly, Atkinson J held that the mother was required to account to the estate for the superannuation death benefits where they would be divided equally between her and her former husband – instead of all being received by the wife.
Lessons:- Make your will and/or check that you have a binding nomination with all your wills and superannuation funds that nominates your beneficiaries.
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Replacing UK Life insurance: if you continue to pay for UK based life insurance it may be subject to tax in the UK and Australia; we can replace this cost effectively with a tax qualified Australian plan.
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