A recent case involving a legal personal representative and how their duties as a fiduciary interact with superannuation.
This case involved the mother and father of the deceased who were divorced. The deceased died intestate (without a will) and did not have a spouse meaning that his parents were entitled to share his estate equally under the Succession Acts Intestacy Rules.
The deceased’s estate was valued at $80,000.00. The deceased had approximately $450,000.00 in death benefits contained in three different superannuation funds.
The deceased had completed non-binding death benefit nominations in favour of his mother. The deceased suffered from bipolar disease and he had lived with and been cared for by his mother.
The deceased had not shared a relationship with his father for many years prior to his death.
The mother was appointed as the administrator of the deceased’s sons intestate estate.
The mother, separately, applied to the superannuation funds for the payment of the super death benefits to her personally, on the basis that she was in an interdependency relationship with the deceased (as a result of their living together in a financially interdependent relationship). All three funds paid the death benefits to the mother.
The father argued that the mother, as personal representative (administrator) of the deceased’s estate, had a duty to gather in all of the assets of the estate.
The father also argued that she had a fiduciary duty not to allow a conflict of her personal interests and her duty as administrator to occur.
He submitted that in seeking payment of the superannuation death benefits to herself personally, without also doing so on behalf of the estate, or otherwise, without also informing him that he could apply to the funds she had breached both of her duties.
The judge held that an administrator, without a personal conflicting interest, would in the usual course of administration make an application for the payment of the superannuation to the estate.
The superannuation trustee then may make the decision (with the widest discretion) whether to make the payment to the estate or on the member’s dependant/s.
The judge found that there was a clear conflict of the mother’s duty as administrator of her son’s estate and her personal interest when she made application to each of the superannuation funds for the moneys to be paid to her personally rather than to the estate. She was preferring her own interests above her duty as administrator of the estate.
The mother was ordered to pay to the estate the amount the of superannuation benefit received by herself personally.