This case concerns whether the trustee’s decision to pay the entire death benefit to the claimed partner of the deceased (contrary to both a preferred nomination form and a will signed shortly before death) was fair and reasonable in the circumstances.
The deceased member made a preferred nomination on 27 July 2014 in which he nominated the claimed partner to receive 70% of the death benefit and for his son and daughter to each receive 15%. Similarly, a will signed six days before provided that the household goods and a car were to be left solely to the claimed partner with the residual estate divided 70% to the claimed partner and 15% to each of the son and daughter. The member died shortly after the completion of these two documents on 5 August 2014. The member also had a wife to whom he had been married for 30 years. Evidence before the Tribunal indicated that the separated couple had a finalised property settlement, had not spoken to each other for some years and were completely financially independent of each other. The son and daughter were both adults and also not financially dependent on their father at the date of his death.
The wife asserted that the claimed partner was a flatmate of the deceased but this was contradicted by evidence of a joint bank account and joint lease documentation, together with a statutory declaration from a friend of the deceased attesting that the relationship between the deceased and the claimed partner was a bona fide connubial relationship.
Under the terms of the trust deed (which reflected the Superannuation Industry (Supervision) Act 1993 (SIS Act) concerning interdependency relationships) there were four people who satisfied the definition of "dependant". They were the claimed partner, the wife, the son and the daughter.
The trustee pointed out that it was mindful that the purpose of superannuation is to provide continued financial support had the deceased member survived. On the facts, the trustee was satisfied that the claimed partner was a "dependant" (as defined in the trust deed) and that had the deceased member survived he and the claimed partner would have shared the superannuation benefit in retirement. The trustee noted the contents of the will but was not bound by it. The trustee had reviewed its original decision to pay the entire death benefit to the claimed partner and had reaffirmed that decision.
In these circumstances, the Tribunal was satisfied that the trustee’s decision was fair and reasonable in its operation and so it affirmed the decision to pay the entire death benefit to the claimed partner.
This case explores the factual situation of the deceased member having been married twice and children from the previous marriage expecting a death benefit payment.
The deceased member was only 57 when he died and he had been very ill for some time. He was survived by his wife, their 10 month old baby daughter and three adult children from his previous marriage (a son and two daughters).
The adult children wanted this death benefit (being insurance proceeds only) shared equally amongst the four children on the basis that this would be the fairest distribution. The trustee disagreed and decided to pay the entire death benefit to the deceased’s wife for her benefit and for the benefit, education and maintenance of the baby daughter. The issue before the Tribunal was whether the trustee’s decision was fair and reasonable in the circumstances.
The adult son submitted that the wife and minor child had received the entire estate and the balance of another superannuation account and that they simply wanted this death benefit to be shared equally between all the children of the deceased.
The son also submitted that some financial assistance was provided by his father in the form of a car, computer equipment and living support when needed. There was also a level of co-dependency between the father and his adult children as he had relied on them to take him to medical appointments. The son also queried the validity of a non-lapsing binding death benefit nomination (Nomination) and the will which were both executed shortly before he died. The Nomination did not relate to the death benefit that was the subject of this complaint.
The wife provided evidence to the effect that all of the money received from the other superannuation account had been used to pay off the deceased’s debts. She had also re-mortgaged her home to pay off other debts, legal bills and funeral expenses. She also submitted that the deceased member had thought the Nomination covered both accounts and that the adult children were healthy independent adults with post graduate qualifications and well-paying jobs. The trustee had complete discretion under the trust deed as to how to distribute this death benefit. Nonetheless, it noted the contents of the Nomination, the will and the fact that immediately prior to his death the member was in a committed relationship with his wife raising an infant child. On this basis, the trustee decided to pay the entire death benefit to the wife.
The Tribunal noted that there was medical evidence that when the will was prepared 13 days before the member’s death the member had "intact cognition and capacity to make independent decisions".
The Tribunal also did not doubt that the adult children shared a loving and caring relationship with their father as independent adult children. There was, however, no evidence that any of them were receiving regular financial support and none of them had demonstrated that they were in an interdependency relationship with the deceased immediately prior to his death. Conversely, the wife and the minor child had an expectation, or a right, to receive ongoing financial support from the deceased at the date of his death. In these circumstances, the Tribunal affirmed the decision of the trustee to pay the entire benefit to the wife for her benefit and that of the minor child.
This case concerns payment of the death benefit in equal amounts to the divorced parents of the deceased as non-dependants under the trust deed.
The member was only 21 when he died. He had no spouse/ partner, no children and his parents did not want to apply for letters of administration and so there was no legal personal representative (LPR). It appears the superannuation death benefit was the only item in his estate.
The deceased was survived by his mother and father (divorced and unable to co-operate with each other in the administration of the estate), and three siblings. His eldest sister had had two children and there was evidence of his being close to his niece and nephew. The deceased had not lived with his father since he was 13 and they had a "fractured" relationship which was not repaired before the son’s death. At the date of death, the deceased was not living with his mother. There was evidence that he was a loving, young adult older brother to his younger brother and sister, and a loving caring uncle to his niece and nephew. There was no evidence of him providing any of his family with support and personal care, nor was he providing any of them with financial support. Accordingly, he was not in an interdependency relationship with any family member.
The trustee first proposed that the parents apply to become the LPR but this was not possible as they were in an acrimonious relationship. The trustee then determined that as there were no dependants (as defined in the trust deed) and no LPR, it was able — under the governing rules of the fund — to pay the death benefit to the mother and father in equal shares as non-dependants. The mother objected to this decision made by the trustee. She wanted the death benefit to be paid to her as trustee for the deceased’s two younger siblings and his niece and nephew.
The Tribunal noted that while the mother argued that the father had little to do with his son since he was 13 and had provided no financial support to his son, it did not reduce the father’s biological and legislative entitlement to the death benefit as the father of the deceased. The Tribunal therefore affirmed the trustee’s decision to pay the death benefit to both parents in equal shares as non-dependants.
This article was first published in Super Funds, 1 November 2016.