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SA Entitlement to Superannuation Death Benefit?

Discussion in 'Superannuation Law Forum' started by sherry, 6 June 2015.

  1. sherry

    sherry Member

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    My partner of 7 years died a year ago and my son received 100% pay outs of 3 superannuation policies from the life insurance. He is 16.

    A lawyer said I'm entitled to a percentage.
     
  2. Tracy B

    Tracy B Well-Known Member

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    Hi Sherry,

    Sorry to hear about your loss. As for who is entitled to superannuation, this would be determined by the superannuation fund. The fund will look at two things. First, it will look at whether your partner nominated any beneficiary to receive the assets in the event of death ("binding death nomination"). If your partner nominated your son to receive 100% of the assets, then the superannuation fund will prioritise this and release to your son. If there is no nomination, you (as the personal representative, or the nominated personal representative) will need to fill in a form that states their relationship with the account holder and whether the account holder had any dependants. Then, the superannuation fund will have discretion to decide whether to pay to the estate (including yourself) or dependants. Assets in a superannuation fund do not automatically form part of the estate. Therefore, it cannot be accounted for in a will and will not come under rules of intestacy. The superannuation fund has discretion who to distribute to.
     
  3. sherry

    sherry Member

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    Due to suicide there was no will. No estate of any kind. 2 Superannuation. Funds paid out %100 to my son. As he is the only dependant they didn't. Discuss any other beneficiary. I went to a lawyer to ask if I could purchase a house for him. He then proceeded trying to get me a % in the 3rd super payout currently ongoing. He has not addressed my initial request. He did not give me any costs till 8 months from requesting the costs. I'm not sure if he's drawing out time on this. He says I'm hostile as I don't wish to sign a document as I don't like the way its written. I have signed no agreement on costing. Can I buy a house. Is he trying for a lost cause?
     
  4. sherry

    sherry Member

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    I was with the deceased 8 years but we did not recide under the same roof due to his alcoholism. The last 6 years till his death we were not a couple but were on very good terms. My lawyer is trying for part payout due to our ongoing emotional attachment and me supporting him financially when he asked. Can I purchase a house for my son as part of his trust fund. I know it has to be in my name till he's 18
     
  5. Tracy B

    Tracy B Well-Known Member

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    Hi Sherry,

    Your question seems to have changed and split into two.

    1. Can you buy a house for your son from his trust fund

    I'm assuming you are seeking to use the money from your son's trust account, the same money from your late partner's superannuation, to buy this house? If so, this would depend on: (i) whether you are the trustee of the account or not, (ii) terms of the trust, and (iii) when is your son entitled to the trust. Generally, the trustee of a trust can invest this money if it is in the interest of the beneficiary (your son) to do so. This includes using part of it toward a real estate investment. However, the trustee has a fiduciary obligation to act in the best interests of the beneficiary. This means, the investment must be solely in the interests of your son. To show this, you could think about getting some financial advice, valuations from estate agents, renting the property out at market (or above market) rate.

    2. The lawyer not answering your original question and "dragging the issue out"

    The lawyer should have advised you on fees and costs before retaining you as a client. If not, ask him to give you a breakdown of fees. Did you sign a retainer (agreement to have this lawyer represent you and offer you his services)? You should be firm with your lawyer. Ask him exactly what is going on with your matter, what and why he is doing what he is doing on your behalf, and be clear about what your instructions are. If you want him to pursue a payout from the third superannuation fund, then have the lawyer draft a letter stating that these are your instructions and sign it. If not, write this in a letter to your lawyer. It is the lawyer's duty to follow your instructions and not go beyond this. If he does, you may not need to pay him.

    3. What exactly is it that you want from your late partner's superannuation funds?

    If sounds like this money is all going to your son. Are you not happy with this? Are you disputing with your son for the funds? Or are you just looking at what you can do as trustee of your son's account?

    If you and your late partner separated over 6 years ago, despite being on good terms with him, this does not give you an automatic right to his superannuation fund. In fact, nobody has an automatic right to anybody's superannuation fund except the beneficiary of the fund. If the beneficiary (your later partner) dies, then it goes to the nominated personal representative. If there is no such nomination, then it is the choice of the superannuation fund who they distribute the money to. For this, best to ask for a copy of the superannuation fund's distribution policy.
     
  6. sherry

    sherry Member

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    I am quite happy for my son to receive all of the money. The issue to begin with was buying a house for him. I have always rented and as I am a single mum also bringing up my 2 little grandchildren age 6 and 7. Working full time and at my age is hard, so I am part time, I am quite willing for the amount of rent I now pay go into the fund for my son.
    My son has become depressed since his fathers death and no longer goes to school. I would like to invest in a house also to prevent him wasting the fund when he becomes of age at 18. I would only purchase a home reasonably priced, so that it would resale at a profit. if he chose to sell when 18. I am the trustee for my son . The trust fund states as set up by the superannuation fund that I can not benefit financially. My son is angered by the fact I have not purchased a house for us to live in. My lawyer has stated the only legal way to live in the house is for me to buy it with monies I personally receive as a beneficiary. I can not see why I cant live in a house purchased for him which he will receive at 18.
    If I put rent monies aside for him to receive in a interest bearing account for him, would this be possible? Who would be best to get in touch with on how this can be done. He has also asked if I would rent a house for him to live in by himself, ? That I see as wasted inheritance, also because he has dropped out of school, I will not receive tax benefit for him and he is not entitled to any government payments . Therefore I am in fact loosing monies, and him renting and supporting himself out of the trust fund would be a very large amount leaving his fund. Two previous superannuation funds have stated they go by a tier method as to who receives payment. No 1 children No 2 then they look at wives etc. only if there are no children. I believe my lawyer is wasting my time.
    When I asked for papers to written the way I wanted, he said I was hostile and perhaps look for another lawyer. And he would send me a bill. I at no time signed a retainer, he has only just recently sent me a document to sign which he has also stated his what I thought to be secretary is to be retained as a lawyer also. I did however sign a document to the super fund that he is dealing with the claim. I have not signed a retainer. He has sent emails to the affect I have asked twice previously for costs. He did not give a breakdown of pricing,
     
  7. Smiley

    Smiley Well-Known Member

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    Hi Sherry,

    I have read the above comments from Tracey B and agree.

    It appears you are most concerned with the potential missuse of funds from your son.

    As he is sweet 16, it is likely his funds will be placed in a Trust account. As per who the Trustee is of the Trust account I do not know, but generally this would be you as the mother of your son. However, as you have not mentioned this in your previous comments, there maybe more to this.

    If you were Trustee, you could potentially use a portion of the funds to purchase a home under your sons name. As long as you acted in the "best interest" of you son.

    To assist in ensuring you are acting in the best interest of your son, you should obtain professional advice and follow it. This way if it was argued by another party that you are not acting in the best interest of your son, you can demonstrate you sought advice and followed it.

    Regards,
     

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