The distribution of superannuation death benefits can sometimes become a complex and emotionally-charged issue. This was illustrated in a recent decision by the Superannuation Complaints Tribunal that followed complaints about how a super fund intended to distribute super death benefits. The deceased member's de facto spouse and his sisters (acting in their role as executors of his estate) had separately lodged complaints to the tribunal about the proposed distribution. The tribunal's decision should emphasise to super members about why they should think about what may become of their super death benefits – comprising super savings and insurance entitlements – in the event of their death. Recognition of the need for estate planning in relation to superannuation will no doubt grow as super balances increase. In this particular case considered by the tribunal, the super fund's trustees proposed to pay 50% of the deceased's super benefits to his de facto spouse with the remaining 50% to the executors of his estate. However, the deceased sisters as executors wanted the entire paid to their parents to whom the deceased had provided some support and assistance. In its decision, the tribunal accepted that one of the complainants had a de facto relationship with the deceased at the time of his death. And, nevertheless, there was at least an "independency relationship" between the two. The tribunal set aside the fund trustees' decision and decided to allocate 70% of the death benefit to the de facto spouse, 20% to the deceased's mother because of the loss of his assistance and support to her, and 10% to his father for the same reason. Interesting, a document had existed in which the deceased had appeared to nominate his de facto as his preferred beneficiary of his super death benefits. But the validity of the document had been disputed. When fund members consider estate planning for their super, matters to address would include whether to nominate a preferred beneficiary, whether to make a binding death benefit nomination (if provided for in the fund trust deed), and need to understand the discretionary power of a fund trustee to distribute super death benefits if a binding death benefit nomination has not been made.
20th-November-2009 | 