Claiming superannuation death benefits
The amount of wealth held by Australians in superannuation is growing significantly every year. When a person dies, they may have accumulated a substantial amount in superannuation and in addition, many hold a life insurance policy within their fund.
Contrary to popular belief, superannuation is not necessarily dealt with as part of a deceased person’s estate. Instead, the rules of the superannuation fund and superannuation law will govern how it will be dealt with on the death of a member. In most situations, the death benefits will be paid either to dependents of the deceased (e.g. spouse or children) or to the deceased’s estate.
Each fund is different and rules for payment of superannuation death benefits differ substantially.
The superannuation fund trustee will determine how to pay the death benefits and advise the potential beneficiaries. If an interested party is unhappy with the trustee’s determination, they can lodge an objection with the Australian Financial Complaints Authority (AFCA). AFCA is a government body which will review the decision and determine whether it is fair and reasonable.
An objection to AFCA must be lodged within a specified time after the trustee’s determination (usually 28 days).
Superannuation disputes are often complex and it is crucial to seek legal advice as early as possible.
Recent cases
In C v G, we acted for an adult child of a deceased who died with superannuation being his only substantial asset. The superannuation fund trustee determined to pay the whole of the benefit to the deceased’s other two children. We lodged an objection with AFCA and were able to resolve the dispute by negotiation on favourable terms.
In X v P, we acted for the family of a deceased person whose only substantial asset was his superannuation (and associated life insurance policy). The superannuation fund trustee determined to pay the benefit to a person alleging they were the deceased’s de facto partner. After our intervention, AFCA determined the person not to have been in a de facto relationship and overturned the trustee’s decision.
In Q v Q, we acted for the executor of an estate where there was a large superannuation death benefit. The fund trustee determined to pay the benefits to the estate. The spouse of the deceased objected to the payment to the estate and contended it should be paid to her. An objection was filed with AFCA. We resolved the dispute on favourable terms by negotiation.
In PL v R, we acted for the spouse of a deceased who had made a non-binding nomination largely in favour of his adult children, leaving only a small portion to his spouse. After submissions from us, the superannuation fund trustee determined to pay the whole of the benefit to our client.
In C v U we acted for the administrator of an estate where the only significant asset of the deceased was a large superannuation death benefit. The fund trustee decided that a binding nomination in favour of the estate was invalid due to a subsequent divorce. The fund trustee determined to pay the benefit to one dependant rather than to the estate (where it would have been shared between other family members). We filed an objection with AFCA, which was ultimately favourably resolved by negotiation during the AFCA process.
Inheritance disputes
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