Australia: Who gets the superannuation on death?

Last Updated: 15 August 2017
Article by Selwyn Black

The importance of nominating a beneficiary.

A considerable proportion of our wealth now sits in superannuation. As a result there are now often competing claims for the superannuation balance on death, including between surviving family members, and also with others such as de facto spouses, and persons who lived in a mutually supportive household.

In many cases, disputes over the payment of the super benefits on death can be avoided altogether if the deceased has nominated a beneficiary with each of their super funds. These nominations should be duly executed and should be regularly updated to ensure that they remain current and effective.

In the absence of a binding nomination, the Trust Deeds of many Australian superannuation funds dictate that the death benefit is to be paid out to one or more of the following:

  • a Legal Personal Representative (LPR); and
    • Under the Superannuation Industry (Supervision) Act 1993, this includes the executor of a will, administrator of the estate of a deceased person, the trustee of the estate of a person under a legal disability or a person who holds an enduring power of attorney granted by a person.
  • any Dependants; and
    • frequently this is defined with reference to the Superannuation Industry (Supervision) Act 1993 and commonly includes the spouse or children of the deceased but may also extend to others including those who were financially interdependent with the deceased, at the time of death.
  • in some cases, any other person.

The discretion conferred on Super Fund Trustees to distribute the death benefit in the absence of a binding nomination varies considerably based on the terms of the Trust Deed. Some Trust Deeds require that the Trustee must pay the death benefit first to a Legal Personal Representative, and only in the absence of an LPR can the death benefit be paid to dependants. Others grant the Trustee wide discretion to allocate the death benefit between an LPR and any of the dependants of the deceased.

Whilst a valid and current nomination will generally have first priority, trustees will in some trust deeds have a discretion. The manner in which they exercise it will sometimes cause disappointment.

Options for seeking review of the Trustees decision for payment of a death benefit

  1. Internal Review
    1. In most cases, if you are not satisfied with the decision that a Trustee has made with respect to the payment of a death benefit, the first step will be to request that the Trustee review the decision.
    2. A complainant should request a review as soon as possible after being notified of a decision, as such requests are time-limited.
    3. Often, a person seeking such a review will need to present supporting documents, demonstrating why they should be paid the death benefit.

    If the Trustee affirms their original decision, avenues available to escalate the matter include:

  1. Making a complaint to the Superannuation Complaints Tribunal (SCT)
    1. Complaints about the distribution of a death benefit fall within the jurisdiction of the Superannuation Complaints Tribunal. All complaints made to the SCT must be in writing.
    2. Once a complaint is received by the SCT, conciliation by teleconference is likely. According to s 27 of the Superannuation (Resolution of Complaints) Act 1993, attending conciliation is a mandatory part of the process.
    3. In the event that a Trust Deed confers a wide discretion upon the Trustee to distribute the death benefit, it is unlikely that the SCT will overturn an original decision regarding the payment of the death benefit. Often, this can only be done if the SCT is not satisfied that the original decision was fair and reasonable. The consequence of this may be that regardless of any conciliation, the Trustee may, unless reasonably satisfied they were incorrect, carry out the original decision.
    4. In some instances, a matter may not reach the conciliation stage. For instance, under s 22(3)(b) of the Superannuation (Resolution of Complaints) Act 1993, the SCT may treat a complaint, once received, as withdrawn on the basis that it is misconceived. Avenues available for dissatisfied complainants include an application for judicial review in the Federal Court (to be made within 28 days) and a complaint to the Commonwealth Ombudsman.
    5. It should be noted that by 1 July 2018, the SCT, along with the Financial Ombudsman Service (FOS) and the Credit and Investment Ombudsman (CIO) will be merged into what the Australian Government is terming a 'one-stop shop', the Australian Financial Complaints Authority. This should not affect the resolution of disputes lodged before 1 July 2018. In recognition of the considerable backlog of complaints received by the SCT, the SCT will continue operations until 1 July 2020.
  1. Applying for a grant or re-seal of probate (if there is a will) or letters of administration (if there is not a will) in the relevant jurisdiction
    1. The choice between seeking a grant of probate and seeking letters of administration will be determined by whether or not the deceased left a will and named an executor. If the answer to that is yes, then the executor should apply for probate. This should be done promptly.
    2. Strictly, the grant of probate or letters of administration only enables the person or persons appointed to deal for or give a receipt for property in the state where the grant is made. For this purpose it is necessary to check which state the superannuation trustee is based in, since a grant or re-seal of probate or letters of administration may be required in that jurisdiction. That will be significant because the laws of that jurisdiction, including those allowing for family provision claim by other family members, de facto spouses and defendants, may then apply and allow the other persons (despite the terms of any will or the statutory order of payments in where there is no will, for that jurisdiction), to make a "family provision" claim. This will be particularly significant if the superannuation trustee pays the death benefit to the LPR so that it becomes part of the estate. There will also be circumstances where such claims can be made on the superannuation if it is part of "notional property" for the purposes of the family provision laws.
    3. There are time limits, with some limited grounds for extensions with Court approval, for making a family provision claim so legal advice should be sought promptly.

As with any other areas, there are specific rules and procedures applicable. We welcome enquiries.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions