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Why not have a will?

Warren Wackerling and Luke Bull – 8 October 2014

Introduction

Superannuation benefits are often overlooked when one is considering their estate planning.  Sometimes, superannuation can be the largest ‘asset’ of a deceased estate and shouldn’t be overlooked.  We’ve previouisly highlighted problems which can arise in estate administration involving superannuation (see for example, our article ‘A super problem in estate planning).  A recent decision of the Supreme Court of Queensland highlights the importance of careful estate planning and hits home why everyone, no matter how simple or complex your asset holdings, should have a will.

Facts

In 2013 a male died leaving approximately $80,000 in net assets and $454,000 in superannuation benefits. The male, in his early forties, died without a surviving spouse or child and he never made a will or a binding death nomination on his superaunnation fund.

As there was no will, the deceased’s parents whom were estranged, were jointly entitled to administer their son’s estate under the rules of intestacy.  Their son’s estate was to be divide equally between them.  The mother made a costly application to the Supreme Court for a grant of administration to carry out the estate administration as without a will appointing her as executor, she did not have that right without a grant from the court.

The deceased had not nominated to his superannuation fund where he wanted his benefit to pass upon his death.  The superannuation was dealt with by the mother by way of request to the superanuation fund trustee to pay all proceeds to her, rather than deal with the benefit by payment to the estate to be divided equally between the mother and father.

By application to the Court, the father contested this move and successfully argued the mother had a fiduciary obligation to maximise the return of the estate by having the superannuation benefit paid to the estate.

The Court found the mother had a fiduciary duty as administrator and by collecting the superannuation for herself, the mother was in breach of that duty and was ordered to pay the the father an equal share of the superannuation benefits.

What do I need to be careful about?

This case highlights that for everyone, no matter what your situation is, having a will and considering a binding death nominationi with your superannuation fund can be crucial to effective estate planning.  Without either, a costly and sometimes bitter dispute can follow.

Similarly, it is just as important to consider how update your wills and binding death nominations are from time to time.

Download the decision here.

This article is for general information only and should not be relied upon as a substitute for specific legal advice.