A recent case before the Supreme Court of Queensland has highlighted the different issues that can arise during the estate planning process, especially when it comes to superannuation.
The case arose when a 40 year old man died intestate. The sole beneficiary of his estate was the man’s mother, whom he lived with before his death and who also successfully applied to be the administrator of his estate.
Although the man did not leave a will, he had completed a non-binding death nomination for his three superannuation accounts. All three were assigned to his mother and so she did not include them in the distribution of the estate’s assets.
Following enquiries from the deceased’s father, the mother applied to the Courts for clarity on whether or not she had acted legally in not accounting for the superannuation within the distribution of the estate. The Courts disagreed with the mother, finding that these assets should not have been removed from the deceased’s estate.
Although the non-binding nature of the death nominations meant that it was at the mother’s discretion whether or not to include the superannuation in the estate, in this case she ought to have combined them with the rest of the estate.
The reason for this is the position of conflict the mother was in, being both the administrator of the estate and the one of the main beneficiaries. In this situation, the Court ruled that the mother should not have financially benefited from this arrangement at the expense of the other beneficiaries on intestacy.
This case raises a number of key considerations for others, in particular, the problems that can occur in a case of intestacy. Had the deceased drafted a will that appointed an executor who was independent of the beneficiaries of his estate this claim would not have arisen.
If you would like to draft a will, make sure you do so with the help of a wills and estates lawyer.