The Battle For Superannuation without a will

The fiduciary duty owed by an administrator of an estate, and the need to leave a will, were graphically illustrated in a recent Queensland Supreme Court case (McIntosh v McIntosh (2014) QSC99).

The court held that the mother of a deceased young man who was administering his estate and who applied to receive his superannuation benefits directly from various funds breached her fiduciary duty to the estate.  She was ordered to pay the monies she had received from the funds to the estate.  From the estate the funds were divided between her and her estranged husband.

Had the deceased son made a will appointing his mother as his executor she would not have faced the conflict of interest she faced which rendered her actions unacceptable to the court.

It is common of course for spouses to apply for the superannuation benefits of their deceased partners.  However if the deceased has not left a will and the spouse is also the administrator of the estate then, based on the above decision, the spouse is prohibited from applying for the benefits.  The spouse should instead apply on behalf of the estate.  This could be a problem if the deceased has children of a prior relationship or even a problem between the surviving spouse and his or her children, being children of the deceased.

It is obviously important to make a will and, if possible, a binding death benefit nomination in relation to superannuation benefits.  If a binding nomination is not available then a will should include appropriate adjustment clause for superannuation benefits.