Court Overrides Deceased’s Clear Wishes Due To Technical Error

Courts sometimes appear to preference technical correctness over fairness.

McIntosh v McIntosh [2014] QSC 99 was heard in the Supreme Court of Queensland.

James McIntosh died intestate and without a spouse at 40 years of age. James died leaving an estate worth only about $80,000, but James also had three separate superannuation accounts with large industry funds worth about $450,000. 

James had been living with his mother (Mrs McIntosh). Mrs McIntosh supported James during his various illnesses and he supported her financially. Mrs McIntosh was divorced from James' father (Mr McIntosh) in 1979. James had left a non-binding death benefit nomination in favour of his mother for all three superannuation funds.

Mrs McIntosh was appointed administrator of James' estate after Mr McIntosh withdrew his opposition to her appointment. On Mrs McIntosh's application, the three superannuation death benefits were paid to her. They were tax free as all three funds found there had been an interdependent relationship between James and his mother.

If the superannuation funds had been paid to the estate then Mr McIntosh would have been entitled to one-half of the funds under the Queensland intestacy rules.

Mr McIntosh argued in Court that it was a breach of Mrs McIntosh's fiduciary obligations as administrator of James' estate for her to seek payment of the superannuation funds for herself rather than for the estate.

The Court found that Mrs McIntosh had a conflict of interest and had preferred her own interest to that of the estate and as such had breached both the relevant Queensland statutory provisions and her fiduciary duties as a trustee at common law.

Mrs McIntosh was ordered to pay the estate all of the superannuation death benefits paid to her.

This decision by the Queensland Supreme Court serves as a reminder that:

• fiduciary duties that apply to legal personal representatives are strict;

• even if a personal estate is small, a Will is still important;

• having a valid binding death benefit nomination in place for superannuation benefits is also important;

• even if there is no Will or valid binding death benefit nomination, it is critical that the right people are controlling a self-managed superannuation fund upon death.

We can assist if you require advice with respect to estate planning issues.