Memo to Accountants: Warning Signs That Your Client May Be at Risk

The recent case of Diedler v Borowiec 2023 WASC 396 is perhaps a cautionary tale for those beneficiaries of a doubtful will. The Deceased made a will with the Public Trustee in 2018. At the time he has 97 years old. For all intents and purposes, when the will was prepared, the Deceased appeared to have capacity- he lived independently, drove his own car (!) and managed his own finances. He did not want his step son and his own daughter to benefit from his estate. Following a trial , a judge found that the Deceased suffered from delusions at the time he made the will including a belief that his daughter was a witch, was trying to poison him. That she was practising witchcraft and that she flew through his window and was stealing items form him. In fact there had been concerns about his mental health for a least five years prior to him making the will. Following his death, the Public Trustee obtained medical reports and came to the conclusion that the 2018 will was invalid. However, the beneficiaries of the 2018 will were not happy with that decision and decided to seek proof of it by issuing proceedings in solemn form in the Supreme Court of Western Australia. Having lost the case, the question arose as to who should pay the solicitors costs. The court found that, having regard to the medical evidence, it was unreasonable for the beneficiaries of the 2018 will to have sought to prove it. Several offers of settlement (‘Calderbank Offers’) had been made by the beneficiaries of an earlier (1981) will, all of which had been rejected. The court ordered that the Plaintiffs (the beneficiaries of the 2018 will) pay the Defendants costs on an indemnity basis. Those costs would no doubt be very substantial. Although the person seeking to propound the will may have a honest (bona fide) belief that the will is valid, the belief must also be reasonable. On the facts, with the available medical evidence, the court found that the belief was not reasonable and the Plaintiff should bear not only their own legal costs but also the Defendants. As a point of reference, in the Victorian case of O’Donoghue v Mussett [2008] VSC 63, the Plaintiff’s costs were $250,000 up to the third day of a trial. The Defendant’s costs would be similar, so it becomes a very expensive exercise and not on to be lightly undertaken. If you need advice concerning the validity of a will, contact us now.

Great care must be taken when drafting a will to cover the situation where you have assets in different countries. Generally speaking, if you make a will in Australia (or in any other country) it will deal with all of your estate wherever situated including land held in any country (such as, for example, in the UK or India). This would require, upon your death, for a grant of probate to be obtained in Australia to deal with the Australian assets and then for that grant to be ‘resealed’ in the other country to deal with the assets in that country. This is a straight forward process in countries that are "One of Her Majesty's Dominions" but may be more difficult in other countries that have different systems of law. There may be situations where it is preferable to have two wills, one for each country where the assets are held. For example, it may be appropriate to appoint an Australian executor to deal with the assets in Australia and a will appointing a UK executor to deal with the assets in the United Kingdom. Particular care should be taken when preparing such wills. We would recommend that only an experienced solicitor be engaged (in each country) and the solicitor preparing the second will should be given a copy of the will made in the other country. An example of what can go wrong can be seen in Sangha v Estate of Diljit Kaur Sangha 2022 EWHC 2157 Ch . There, the deceased had assets (about £35m worth) in both the UK and India and made a will in India in 2016 that had a (standard) revocation clause (to the effect “I hereby revoke all prior wills”). The question arose was did this revoke an earlier will made in the UK in 2007 that left all of the Deceased’s UK property to his second wife. In the event it was held (on appeal) that the Indian will made in 2016 did not revoke the earlier 2007 UK will. Such a situation could have been avoided altogether if the Indian will had expressly stated “I revoke all my previous wills including any will made by me dealing with my estate located outside of India” or (if that was not the intention) “I revoke all my previous wills except any will dealing solely with my estate in the United Kingdom’. If you need help preparing a will, please contact us on 08 9398 5533 .

Does the ending of a De Facto Relationship Revoke a will? Does the ending of a de facto relationship revoke a will/ de facto and revoke specialist In Western Australia, effective from the 9th February 2008, divorce has the effect of revoking a will. Prior to that time, a person might separate from their spouse, effect a matrimonial property settlement, obtain a divorce and, having omitted to make a new will, find that their entire estate is bequeathed to their much despised ex-wife. To avoid this undesired outcome (until such time as section 14A was enacted), the clear obligation rested upon the will maker to make a new will as soon as they separated from their spouse. What then, is the situation for wills where a de facto relationship has come to an end between the time of the making of the will and the will makers’ death? It is noteworthy that the amendment to the Wills Act in 2007 enacting Section 14A refers only to marriages (and not de facto relationships): “(1) In this section — Family Court of Australia means the Family Court of Australia created by the Family Law Act; Family Law Act means the Family Law Act 1975 of the Commonwealth.” No reference is made in section 14A of the Wills Act to the Family Court Act 1997, which, since the amendments made by the Family Court Amendment Act 2002 gives exclusive power to the Family Court of Western Australia to settle disputes between de facto partners. There is, it is submitted, a compelling argument (as a matter of statutory construction) that the omission of any reference to the ending of a de facto relationship in section 14A of the Wills Act, meant that parliament did not intend such relationships to be covered, particularly since the amendment came into effect some five years after the amendment to the Family Court Act 1997 that gave the Family Court of Western Australia the jurisdiction to deal with de facto relationships. The matter was recently considered by Master Sanderson in Blyth v Wilken [2015] 486 See case here The facts were that the deceased died on the 28th August 2014 having made a will dated the 2nd December 2003 leaving his entire estate “UPON TRUST for my de facto wife KATHRINE MARY MURRAY absolutely provided she survives me for a period of twenty-eight (28) days”. Ms Murray did so survive him. The difficulty was that the de facto relationship had ended on 21 December 2011. At paragraph 7, Master Sanderson said: “Pursuant to s 14(2) of the Wills Act when a married couple is divorced any will then in existence is revoked. The section makes it plain revocation takes place upon the orders dissolving the marriage being issued. In other words the involvement of the Family Court of Western Australia is a precursor to the will being revoked. With a de facto relationship the parties are free to go their own way by agreement. They may, under the appropriate legislation, resort to the Family Court if they cannot resolve their differences with respect to property or children. But even if the Family Court is involved in those types of disputes at no time does the Family Court issue a decree which dissolves the relationship. Thus a will entered into by a de facto partner when the relationship is sound continues to apply even when the relationship is dissolved.’ (underlining added for emphasis). Those comments would appear to support the proposition that the ending of a de facto relationship does not, of itself, revoke a will. However, the Master found that the gift to Ms Murray was not effective: “9 In my view to read the will in that way ignores the reality of the relationship. The deceased bequeathed the property to Ms Murray because she was his de facto wife. Once that ceased to be the case it seems to me the intended disposition should fall away. The position can be contrasted with a gift to ‘my son John’. If after the signing of the will the testator and his son became estranged it would not alter the fact that the phrase ‘my son John’ would still describe a particular person and a particular relationship.” It is submitted that the reasoning is not compelling (even if the result may have been appropriate in the circumstances). What if the will had referred to the de facto only by name and not included the description “my de facto wife”? Just as a divorced will maker who did not wish an ex-wife to benefit was required to make a new will before the enactment of Section 14A, so to could a separated de facto partner make a new will to avoid this result if they so desired. What of the will maker who may still wish his “ex” de facto to be able to receive his estate (perhaps because those who would take on an intestacy are, in the will makers eyes, less deserving)? The Blyth decision would suggest that the will maker would need to prepare a new will confirming their intentions. Another argument against the interpretation that was adopted is that wills are generally construed so as to avoid intestacy. The decision also raises the interesting question of when does a de facto relationship end? As to that issue, consider the recent case of Chan v Waldemar Mazurkiewicz [2015] WASC 432 See Chan case here If the relationship has ended (albeit only a short time before the will maker’s death) then, on the basis of the Blyth decision, the (now ex) de facto would not be entitled in the estate (regardless of whether any property settlement had been reached in the Family Court or otherwise). Nor would the ex de facto be entitled on an intestacy (since they would not have been in the relationship “immediately” before the Deceased’s death as required by Section 15 of the Administration Act.) Neither would the ex de facto have any claim under the Family Provision Act (again subject to the evidentiary issue that the de facto relationship had in fact ended – the onus of establishing being on the person asserting the continued existence of the relationship –see Chan). These circumstances lead to the recommendation that, in the event of a de facto relationship coming to an end: 1) The will maker should immediately make a new will; 2) The de facto partner prejudiced by potentially being omitted from the will should immediately commence proceedings in the Family Court of Western Australia for property orders to safeguard against the possibility of the will maker dying before any property settlement is reached. Such proceedings could then be maintained against the Deceased’s estate and avoid the uncertainties of a Family Provision Act claim. This entry was posted in Uncategorized on February 12, 2016.

“The making of home-made Wills can lead to problems. That statement is not a paid advertisement for the legal profession. It is a statement of fact. This case illustrates the point.” Per Master Sanderson Epps v Homer [2006] 290 The Background Mr and Mrs H. were married in 1986. Mr H. had three children from a previous marriage. Mrs H. had four children from a previous marriage. Mr H. got a will kit from a newsagency and drafted wills. What they wanted to achieve It appears that what Mr H and Mrs H wanted to achieve was: i) to give certain specific items to their respective children; ii) Mr H gave $15,000.00 to be divided between his children; iii) The remainder of their estate (‘the residue’) was to go to the survivor of them; iv) Upon the death of the survivor of them (that is when the last of them died) the residue was to be split 50% between Mr H’s children and 50% between Mrs H’s children. A perfectly straightforward and reasonable arrangement for blended families. What the will said After the arrangements described in (i) and (ii) above Mr H.’s will said: “BUT IN THE EVENT THAT MY WIFE …. AND MYSELF SHOULD PASS AWAY AT THE SAME TIME (emphasis added)….. I LEAVE ALL THAT PART OF MY ESTATE BEQUEATHED TO MY WIFE TO OUR CHILDREN, FIFTY PERCENT (50%) TO BE SHARED EQUALLY BETWEEN MY NATURAL CHILDREN, AS PREVIOUSLY NAMED, THE REMAINING FIFTY PERCENT (50%) TO MY STEP CHILDREN, TO BE SHARED EQUALLY” (between them). The Problem Mr H. died in 2004. Mrs H. had died in 1998 (six years before). They had not died “at the same time” as contemplated in the clause in the will. The question was, did the wording of the will have the effect that the residue of the estate would be split 50/50 in these circumstances? The court said no. The words used were unambiguous. Mr and Mrs H. had not passed away “at the same time”. There was a six year gap between their deaths. What Mr and Mr H had really meant to say was “If (my wife or husband) does not survive me to divide the residue of my estate equally between those of my children and my (wife or husband’s) children.” The unhappy or happy result (depending upon your point of view) The clause in the will failed. There was an intestacy of the part of the will dealing with the residue (which was most of the estate). According to the rules of intestacy, Mr H.’s children were entitled to all of the remainder of his estate and Mrs H’s children missed out- step children are not a person’s children unless they are legally adopted. This entry was posted in Uncategorized on February 19, 2016.

Is a will that hasn’t been signed or dated properly invalid? The easy bit first: a will does not have to be dated to be valid. In Australia, none of the Acts governing the requirements for a valid will require it to be dated. It is, of course, a very good idea to date a will, not least because a dispute may otherwise arise (if there is more than one will) as to which one was made last. The requirements for a valid will are (in all states and territories of Australia) that the will be signed by the will maker in the presence of two witnesses (some Acts require both the witnesses and the will maker to all be present at the same time, but others permit the second witness to sign later). Again, as a matter of practice, it is a good idea that everyone is present at the same time as this safeguards against allegations of impropriety. Very often, wills are not signed properly: sometimes there is only one witness and sometimes none. Occasionally, wills get signed by the wrong person (the husband signs the wife’s will by mistake, the wife the husband’s will by mistake). In all of these situations, wills have nevertheless been upheld as valid. In each State and Territory, legislation exists that permits otherwise invalid wills to be admitted to probate. These provisions are generally referred to as ‘dispensing powers’ (that is, they dispense with the usual formal legal requirements required to make a will). In Western Australia Section 32 (2) of the Wills Act relevantly provides that: a document may be admitted to probate, if it is: A document purporting to embody the testamentary intentions of a deceased person, even though it has not been executed in the manner required by (the Wills Act)… if the Supreme Court is satisfied that the person intended the document to constitute the person’s will.. “ The courts have interpreted this to mean: There must be a document; The document must purport to embody the testamentary intentions of the Deceased; The court must be satisfied that, either, at the time of the document being brought into being, or, at some later time, the Deceased, by some act of words, demonstrated that it was his or her then intention that the document should, operate as her, or his, will. Lawyers commonly refer to such documents as “informal wills”. In every case it is a question of the intention of the person making the will: did the person making the document intend it to be his will? Sometimes the intention is readily inferred from the circumstances: for example, if a person buys a will kit (you know, the ones you get from the newsagency headed “Legal will” or similar), completes it, signs it and then tells someone (or sometimes ‘everyone’) that they ‘have made a will’, such a document is quite likely to be admitted to probate even though it is not witnessed by two witnesses (or even dated). However, as with most things in the law, ‘it all depends’ on the circumstances- if the person had previously had a will prepared by a solicitor then it could be inferred that they knew that the will should be signed by two witnesses and a court may well be reluctant give probate of the ‘informal will’ . Similarly, if the person was in the habit of telling people that “I’ve made a new will” (when they hadn’t really) then the court would be reluctant to infer that the will was anything but a draft and was not intended to be a final will. Common circumstances in which ‘informal wills’ are made (and either are or are not admitted to probate) are: Suicide Notes Sadly, these arise quite often. Sometimes they are admitted to probate, sometimes they are not. It usually depends on the wording and whether or not there is a valid existing will (if there is a formal valid will, the suicide note is less likely to be admitted to probate). Draft wills prepared by solicitors. It sometimes arises that a person instructs a solicitor to prepare a will. The person sees the lawyer and the lawyer sends a draft (hopefully) only a few days later to the will maker with the request that they advise of any amendments and otherwise ‘come in and sign the will’. Fate intervenes and the will maker dies before the appointment to sign the will (or even having had the opportunity to make an appointment to sign). If the will maker has acknowledged the correctness of the draft (for example, by ringing or telling the lawyer that ‘the draft is fine’) then there is a good chance the will may be accepted into probate. If the will maker never sees the draft (before death) then it is less likely that the document would be accepted into probate. This means that there are cases where a document is accepted into probate even though it has not been signed by the will maker. This entry was posted in Uncategorized on April 8, 2016.

Ten Most Common Mistakes Made with Wills and Estate Planning 1) Not having a will. If you don’t have a will, then you are leaving a problem behind for everyone. This applies even if you situation is ‘simple’ and doubly so if you die leaving a second wife or de facto and children from a previous marriage or relationship. Any will is better than no will. 2) Making your own will. It may be that you are able to make a simple will quite easily. However, if you are making a simple will, make sure you have a simple situation. A ‘blended family’ is never a simple situation. Nor is it simple if you own a business, have a farm (or other significant property). 3) Not understanding that your wishes can be over ridden by a Court. More specifically, this means not understanding that certain groups of people (spouses -including de facto spouses, children – including adult children that you are estranged from) are entitled to provision from your estate. It doesn’t matter that you have had little contact with your (now adult) children since you got a divorce (or for whatever other reason). What matters is that you make ‘adequate and proper’ provision for them. This is not what you decide is ‘adequate and proper’ but what a court thinks. 4) Thinking that you are not in a de facto relationship. It doesn’t matter what lengths you go to (keeping finances separate, keeping separate residences for Centrelink purposes etc). It doesn’t matter that YOU think you are not in a de facto relationship or even if you and your partner both think you are not in a de facto relationship. What matters is whether a court decides that you are in a de facto relationship. 5) Not understanding the difference between joint tenancy and tenants in common. Joint tenancy means that, when one co-owner dies, that persons interest in the property passes authomatically to the survivor. It doesn’t matter if the will says something different. Joint tenancy is great where it is intended that the property goes to the surviving spouse (as it means that no grant of probate is required). However, if there are children from a previous relationship that you wish to benefit, joint tenancy may mean they miss out. 6) Not understanding that Superannuation is not dealt with by your will. If you are a member of a public or industry fund, the trustee of the fund must pay any death benefit according to: a) any Binding death benefit made by you (this can only be to a spouse, a child who is financially dependent upon you or to your estate); b) A ‘financial dependent’. This includes a de facto (see point 4), children and persons who were otherwise financially dependent upon or in an “interdependency relationship” with the Deceased. It may or may not include step children (fact specific). There are many, many cases where the superannuation is paid to a ‘girlfriend’ (who no-one else believes is a de facto) and not to parents or siblings. A SMSF must also be dealt with by the terms of the Superannuation Deed (and not your will). 7) Not understanding that assets held in companies, trusts or partnership are not assets that can be dealt with by your will. 8) Leaving making your will too late If you make a will when you are very elderly or ill, you greatly increase the chance of a challenge on the grounds that you lacked testamentary capacity when you made the will. 9) Not keeping your will safe and where it can be found after you die. All too often the original will cannote be found after you have gone. 10) Thinking it is all too hard. See point 1. This entry was posted in Uncategorized on August 7, 2016.

We are honoured to be recognised by Doyles Guide as a Recommended law firm for Wills and Estate Litigation in 2016 in Western Australia. Reg Biddulph was also recognised as a recommended “Leading Wills and Estates Litigation Lawyer”. A link to Doyle’s Guide can be found here: http://doylesguide.com/western-australia/ Doyle’s Guide is an independent guide that publishes annual lists based upon peer and client reviews. The methodology used to compile the list can be found here: http://doylesguide.com/about-us-methodology/ This entry was posted in Uncategorized on September 21, 2016.

The Road to Hell is Paved with Good Intentions.[i] WILMS -v- WILMS [2016] WASC 396 In 1997, Harry was 57 years old. He had married (for the second time) in 1985. He wanted to buy a property. The property would cost $80,000 to buy. Because of his age and the fact he was then unemployed, it was difficult for him to borrow money. However, Harry had 30 year old son (from his first marriage), Rene, who was living in Sydney. A mortgagor broker told them that he could organise a loan if Rene would assist. Arrangements were put in place whereby the property was purchased in Rene’s name for Harry and his wife to live in. Harry paid the deposit ($16,000) and a loan of $64,000 (in Renee’s name) was obtained. Harald met all the repayments on the loan and by January 2013 had paid off all the loan. By this time, Harry was 73 years old. In February 2013, Rene redrew funds down on the loan (something he could do as both the property and the loan were in his name after all). Around this time, Harry saw a lawyer. He was apparently advised that he should lodge a caveat over the property claiming that, since he had paid the entire purchase price of the property (including the loan repayments) he was really the owner of the property.[ii] Did the Court agree? It all came down to what was agreed to in 1997 when the arrangements were put in place. Unfortunately, the ‘agreement’ was really just a series of conversations made between Harry and his son. Harry’s understanding of the arrangements was that once he had paid all the loan off, Rene would transfer the property to him.[iii] Rene’s understanding was that Harry would meet all the loan repayments (and other expenses on the property) and that Harry (and his wife) could live in the property for the rest of their lives. Rene said that it was always understood that ‘one day the property would be mine’.[iv] Who won? The judge decided that Rene’s version of events was preferable. Harry’s claim was dismissed. Note, however, that pursuant to Rene’s version, Harry had a life interest in the property. The Moral of the Story? Whenever arrangements are made between family members, whether that is simply for an advance of money (a gift or a loan) or more complicated arrangements such as those in this case, the arrangement should be put in writing and signed by all parties. Better still, get a lawyer to write up the agreement. [i] https://en.wikipedia.org/wiki/The_road_to_hell_is_paved_with_good_intentions [ii] The legal claim was on the basis that there was a resulting or constructive trust. [iii] “Although I cannot remember the exact words we both used I put it to Rene that I would pay everything for the house and when it was paid off Rene would transfer the title to me.” [iv] “He asked me whether I would agree to provide a Guarantee to a Bank, in respect of a loan that he, himself was seeking, to facilitate the purchase of the Wanneroo Property. I told him that I did not want to be a Guarantor. I said that I could obtain a Loan in my name alone, and purchase the Property. I also told him that he could live in the home until he died or no longer wanted to live there, and pay rent to me on a monthly basis. I said the amount of rent would be equal to the monthly mortgage repayments, and that I would use the monies that he paid to me as rent, to repay the loan. He told me that the Wanneroo Property would be mine anyway. He also said he’d pay a large enough deposit to ensure that I would not have to take out Mortgage Insurance. He also said he would pay for all of the other costs associated with the purchasing the property.” This entry was posted in Uncategorized on December 19, 2016.

I have dealt with a number of Superannuation Death Benefit claims recently so it might be timely to make few comments about Superannuation Death Benefits. The common situations where disputes arise are: 1) there is a “blended family” (that is where the current spouse of the person who dies is not the parent of the deceased person’s children); and 2) Where the Deceased person is a young person who has not made a will. The second situation is a particularly traumatic one. Unfortunately, very few young people (people under, say 35 years of age) have gone to the trouble either of making a will or preparing a Binding Death Benefit Nomination. Why would they, as they don’t expect to die? However, most Superannuation funds have a ‘death insurance’ component. This will usually be worth over $200,000.00 and quite often a lot more. Who will the Death Benefit be paid to? Case Study 1 The Deceased person committed suicide at age 30. He did not have a will. He did not make any Binding Death Benefit Nomination. He had two superannuation funds (one only had a contributions balance of less than $1,000.00 but an insurance death benefit of nearly $400,000). The other had a death benefit of nearly $200,000.00 most of which was also death insurance. So the total of both Superannuation funds was over $600,000.00 He was not married and had no children. He did, however, have ‘girlfriend’ who had been living with him for about four months. In Western Australia, a “de facto spouse” is only entitled in a Deceased estate if they are living in a de facto relationship immediately before the deceased person died and the relationship had existed for two years before the person died (for a case example about “immediately before death” read the case of: Chan v Mazurkiewicz If the Superannuation Death Benefit was paid to the Deceased’s estate then it would be divided between his siblings (one half) and the other half to his parents. The relationship between the Deceased and the “girlfriend” was (according to the Deceased’s mother) a volatile one and was unlikely to have continued. Both Superannuation Funds made a determination to pay the death benefit to the ‘girlfriend’. Needless to say the Deceased’s mother was distraught. Complaints were made to the Superannuation Complaints Tribunal (“SCT”). In all probability, the decisions of the Super fund trustees would have been upheld by the SCT. However, a deal was negotiated between the parties whereby they agreed to split the Superannuation 50/50. Case Study 2 In this matter, the deceased was aged only 33. Again, death was by suicide. He had Super death benefits payable of about $530,000 and other assets (including a house) with a net value of about $300,000.00. He did not have a will and there were no Binding Death Benefit Nominations in place. He had been in a ‘de facto relationship” for about six years. However, just before he committed suicide, the relationship allegedly came to an end. In point of fact, the Deceased’s parents believed that the Deceased committed suicide after the de facto declined the Deceased’s request to marry him. As in case 1, if there was no de facto entitled in the deceased’s estate, all of his estate would be divided between his parents and his siblings. The Superannuation Funds in this case decided to pay the funds “100%” to the legal Personal Representative. However, the de facto (who denied that the relationship between she and the deceased had come to an end) foreshadowed complaints to the Superannuation Complaints Tribunal and also a claim under the Family Provision Act. Again the matter was settled by a negotiation on the basis that the estate was split 50/50. Superannuation Complaints Tribunal The Superannuation Complaints Tribunal (‘SCT”) deals with complaints from persons aggrieved with a decision made by the Trustees of a Superannuation Fund. Very commonly, the complaints are made when the Superannuation Fund has decided to pay a death benefit to the “de facto” spouse of the Deceased. In many cases, the complainant will be the adult children of the deceased or the persons who would otherwise inherit the Deceased’s estate either through the Deceased’s will or on an intestacy (i.e. no will). Typically, the allegation will be that the “de facto” was not really in a de facto relationship with the Deceased (they were ‘just friends’), or the relationship had ended, or, simply, “the deceased wouldn’t have wanted him/her ot get the death benefit.” Most people, of course, have little experience of what happens to superannuation when a loved one dies. Unfortunately, this is an area of the law that has outcomes, I personally think, that is both unexpected and contrary to what most people think should occur. Most people would agree that any superannuation death benefit should be paid to persons who are financially dependant upon the Deceased. However, they quite reasonably would expect that those people would be the persons either set out in the Deceased’s will or that they woud be the persons who take on an intestacy (if there is no will). The trustees of Superannuation see things quite differently, as guided by the legislation and the terms of the Superannuation Trust Deed. The trustees will invariably point to the fact that if a person wanted the superannuation death benefit to be paid in a particular way, that person would have made sure a Binding Death Benefit Nomination was in place (or a Non Lapsing Nomintion- if the terms of the Super fund trust deed permits it). In partiuclar, if the deceased has wished the death benefit to be dealt with by their will, they would have specified their legal personal representative (that is the executor of the will) as the nominated beneficiary. So if there is no Binding Death Benefit Nomination, the trustees will look to pay to those persons who were financially dependant on the Deceased. The trustees of the Superannuation Fund will look for persons who would have recieved financial support from the Deceased if he had simply retired (rather than died). A summary of how death benefits are dealt with is published by the SCT see: Death Benefits Brochure A deeper understanding of how death benefits are resolved can be found here: Key Considerations that apply to Death Benefits Key Considerations that apply to Death Benefits. http://www.sct.gov.au/dreamcms/app/webroot/uploads/documents/KeyConsiderations-DeathBenClaim.pdf There are also case studies set out on the Superannuation Complaints website that give examples of various situations. What the brochures and case studies don’t give an insight into is how little evidence is acceptable to a trustee before it will decide that a person was ‘financially dependant’ upon the Deceased. It is often the case that the Superannuation Fund decides that it will pay out to the ‘de facto’ even if that relationship has only been in existence for a short time (and other people might conclude that the Deceased and the de facto were only in a casual relationship). You are strongly encouraged to seek legal advice as soon as possible after a person dies. Also, do not rely upon the fact that someone else ‘in the family’ is seeking legal advice (particulary if you are the person who was in a relationship with the deceased).. It is important that you get independent legal advice early in the piece. Challenging a Decision of the Superannuation Fund in the Superannuation Complaints Tribunal The prospects of successfully challenging a decision of the Superannuation Fund are slim: in the reporting year ending 2015 there were some 2668 written complaints to the SCT and 1,739 complaints that were either withdrawn or resolved (of which about 40% related to the payment of death benefits). Of the 1739 complaints dealt with only 286 got to the final stage of being reviewed by the Tribunal. In most cases (224) the original decision of the Superannuation fund was upheld. In percentage terms, this means about 80% of the matters heard by the SCT are upheld (or 20% overturned) and that, overall, only about 3.5% of all applications have a successful outcome. (see page 19 of the annual report) SCT Annual Report 2014-15 The reason why most complaints are unsuccessful is because the Superannuation Complaints Tribunal does not simply make a new determination as to how any death benefit should be paid but rather decides whether it was ‘unfair or unreasonable’ for the Superannuation fund to make that decision in the first place. However, all is not grim: of the 293 concluded death benefit cases in 2014/15, 209 (71.3%) were settled. In other words, even though a decision of the Tribunal is unlikely to be overturned, most clams result in some sort of settlement. No doubt a factor in that leads to settlement is the lengthy delay in matters progressing through the complaint process. If you wish to make (or defend) a complaint to the Superannuation Complaints Tribunal, contact Reg Biddulph .RJB This entry was posted in Uncategorized and tagged Challenge Superannuation Fund decision, de facto and Superannuation, Superannuation, Superannuation Complaints Tribunal on December 19, 2016.