Wednesday, 5 November 2008

Superannuation: husband cannot have two bites of the cherry

A recent Superannuation Complaints Tribunal case illustrates the need to nominate beneficiaries when joining a super fund, as well as the need to have an up to date will and, if you don't want your ex to get any of your property, to say so clearly.


The decision under review was the trustee's decision to pay the death benefit to:



  • 50% to the daughter of the deceased
    member; and

  • 50% to the son of the deceased
    member.


The complainant was the husband of the deceased member who sought payment of
the entire benefit to himself. Neither the daughter nor the son were his children.


The parties married in 1976. She was his third wife and he had five children of his own by
previous marriages. They separated in January 2005 and agreed to a non-binding financial
settlement between them in April 2005. I do not know what is meant in the report about a "non-binding financial settlement" but presumably it was an informal settlement.


The wife died in December 2005.



The trustee submitted that it had not paid any part of the death benefit to the husband
because the parties had separated and had entered into a separation
agreement to divide their assets. The trustee noted that the husband received a greater
share of the assets in exchange for abandoning any right to claim upon the
the wife's superannuation.



The Tribunal identified the potential beneficiaries as:



  • the husband;

  • the two adult children of the wife; and

  • and the five adult stepchildren of the wife (all five
    of whom declined to join as parties to the
    complaint).


The Tribunal considered the wishes of the wife, noting that she made a new will in February 2005, appointing her son and daughter as executors and bequeathing three quarters of her estate to her daughter and one quarter to her son. She also completed a statement in June 2005 saying that she did not want the husband to inherit anything from her estate. She did not
nominate a preferred beneficiary when she joined the fund in August 2005.



The Tribunal considered financial dependency and found that no party was financially dependent on the wife at the time of her death. Further, given that the stepchildren did not wish to claim the death benefit, the Tribunal found that the trustee's decision not to distribute any part of the benefit to them was fair and reasonable.



As to the husband's claim that the sources of the contributions to the fund were from
him, the Tribunal noted that the wife had made an allowance of one half of the value of her superannuation investment in favour of the husband when the parties negotiated the property settlement.


The Tribunal concluded that, given that the wife had already received allowance for the fund benefit and that no-one was financially dependent on the wife at the time of her death, the trustee's decision did not operate unfairly or unreasonably in relation to the husband.



For these reasons, the Tribunal affirmed the trustee's decision.

1 comment:

Anonymous said...

What I don't get is if the mother bequeathed 75% to her daughter and 25% to her son, why did the Trustee make the decision of the split to be 50/50? I'm pleased to hear that the estranged husband didn't get anything, as I'm one of those persons who has had to get a will done to protect my property being taken away by my ex-partners mounting debts. I've bequeathed 100% to my daughter, if anything should happen to me.