Case 1:
The deceased member died of lung cancer at 50 years of age. She was survived by her spouse (who had cared for her throughout her illness), a son (aged 25 at the time of her death), and a daughter (aged 23 at the time of her death).
The trustee decided to pay the entire death benefit to the spouse, but this was objected to by the son. Originally, he wanted the entire death benefit to be divided between himself and his sister, but later he changed his submission, and argued for the benefit to be divided equally between the spouse, himself and his sister. The trustee disagreed and made a partial death benefit payment of $60,000 to the spouse so as to alleviate financial hardship. The balance of the death benefit had not yet been paid out from the fund.
The spouse’s evidence was that he was financially dependent on the deceased. They jointly owned a house that had been mortgaged and it was the deceased’s intention for him to use the death benefit to pay down the mortgage. He was the sole beneficiary of her estate, and it was well known that they had agreed he would leave his estate to their combined three children when he passed. The son did not have much faith in the spouse actually carrying out his mother’s wishes.
Neither of the adult children lived with their mother at the time of her death and, in the spouse’s view, neither were financially dependent on their mother. There was some contradictory evidence that the daughter was in receipt of money from her mother to buy and then run a car. Both children were in full-time education, had significant university debts but had also inherited $300,000 each from their grandmother a fact not known to their mother as she died before her own mother.
The Tribunal noted that there was no dispute the son and daughter satisfied the definition of dependant in both the Superannuation Industry (Supervision) Act 1993 (SIS Act) and in the trust deed. There was also no factual dispute that the spouse satisfied the relevant definition, given the deceased and he lived together on a genuine domestic basis in a relationship just prior to her death. Given these three people could legally be paid the death benefit, the Tribunal held that its approach was “to consider what might have occurred had the member not died, and whether there was anyone who had an expectation of ongoing financial support or a right to look to the deceased member for ongoing financial support”.
On this basis, the Tribunal agreed with the trustee’s decision to pay the entire death benefit to the spouse. It noted he had the sole responsibility of bearing the burden of paying the mortgage on the property he jointly owned with the deceased, together with other financial commitments previously paid, in part, by the deceased. Accordingly, only the spouse had an expectation of ongoing financial support had the deceased not died. Conversely, any financial support to the adult children was merely on an ad-hoc basis.
D17-18 43
Case 2:
The facts in this case are similar to Case 1. Namely, a spouse and adult children from a former relationship in dispute about the decision of the trustee as to how to pay the death benefit. Interestingly, in this case, the trustee decided to divide the benefit equally between the dependants but the spouse thought all the monies should be paid to her, noting she and the deceased had no idea that superannuation death benefits don’t automatically form part of the estate where she was the sole beneficiary.
The deceased died in a traffic accident at age 54. Prior to his death, he lived with his wife and had two adult children who did not live with him. His daughter was 18 years old when he died having just had her 18th birthday. His son would soon have his 21st birthday. He had paid child support for his daughter and son until 18 years of age.
There was evidence that while his children did not live with their father, they visited regularly and, at those times, travel costs, accommodation, and food were all provided by their father and his wife. The Transport Accident Commission classified the son and daughter as dependants but this was disputed by the wife. Both children asserted they were partially dependant on their father but could not provide receipts to prove this was the case, given their father simply paid for things or handed them cash.
The Tribunal applied the same test as in case 1, reviewing the facts to determine what might have occurred had the father not died, and whether there was anyone who had an expectation of ongoing financial support or a right to look to the deceased for ongoing financial support had he not died. In this case, the Tribunal held that the wife and the deceased’s adult children were all financially dependent on him and the trustee’s decision to divide the benefit equally between them was fair and reasonable in the circumstances.
D17-18 32
Case 3:
The trustee decided to pay the entire death benefit to the deceased’s mother on the grounds she was financially dependent on her son. The estranged father disagreed with this decision, and so he complained to the Tribunal.
The deceased member was a single 22-year-old lawyer at the date of his death in November 2011 and was in receipt of a reasonable salary. He lived at home in a caravan on his mother’s property for which he paid rent, although, just prior to his death, he had moved into the house. He also assisted his mother financially, paying cash for items like groceries. The member had not nominated any beneficiary to the trustee and had not completed a binding death benefit nomination. He was survived by several brothers and sisters and his parents were divorced. He had no children.
The father was of the view that the death benefit should have been distributed amongst the “whole family”. It was not in dispute that $255,000 had been paid to the mother from another superannuation fund and, for this reason, the father suggested $255,000 be paid from the fund to him with any remainder split between himself and his former wife.
A few weeks before his death, the member hand wrote a will on a page from an exercise book. He wished for his mother and one brother to be his executors and he left his entire estate to his mother. The father challenged the validity of this document but the Supreme Court of the relevant state held the document to be a valid will and granted probate to the mother. The mother was, therefore, the deceased’s legal personal representative (LPR) with the consequence that if the trustee decided to pay the benefit to her as LPR, it would be distributed to her under the terms of the will.
The trustee did not need to consider this option as it was satisfied that the deceased and his mother were in an interdependency relationship just prior to his death, which resulted in her being a dependant under both the trust deed and the SIS Act. They had a close personal relationship as evidenced by the will; he lived with his mother and supported her financially. He had left $2,000 cash in an envelope for his mother, and he had also provided his mother with domestic and personal support.
The Tribunal held that it was satisfied that the mother was partly dependent on the deceased at his date of death. This fact alone was sufficient to satisfy the definition of dependant in the trust deed and, accordingly, it was not necessary to make a finding on whether the mother was in an interdependency relationship with her son. The Tribunal affirmed the trustee’s decision.
D17-18 25
