Acting as the appointed administrator of your partner’s estate when they pass away, as well as approaching a superannuation trustee to claim their superannuation, gives rise to a big conflict issue – as a case in the Supreme Court of Western Australia earlier this year showed.
When Alicja’s husband Bogusław died in August 2017, his estate comprised of a mortgaged property in his sole name with a net worth of approximately $140,000 and a substantial death benefit from his superannuation fund worth over $541,000.
However, Bogusław did not leave a valid Will and had not signed a binding death benefit nomination (BDBN) – although he had made a non-binding nomination in favour of his brother, Piotr, one of two defendants in the case (the other defendant being his mother, both of whom lived overseas).
As the surviving spouse, on 26 October 2017, Alicja identified herself as the sole claimant to Bogusław’s death benefit and informed the superannuation trustee that she had also sought letters of administration, which were granted to her on 18 December 2017.
After the superannuation trustee had made some further enquiries in relation to any other potential claimants, including Bogusław’s brother Piotr, on 21 May 2018 they proposed that Alicja would be paid 100% of the death benefit as Bogusław’s surviving spouse.
Alicja was informed on 8 June 2018 by the superannuation trustee that they had received an objection to the proposed distribution and, on 7 September 2018, the Australian solicitors for the defendants identified that, citing Burgess v Burgess, in seeking the payment of death benefits to herself, Alicja was in a position of conflict with her duty as an administrator to apply for the payment of death benefits not subject to a BDBN to Bogusław’s estate.
Having received an updated list of claimants to Bogusław’s death benefit, which included Alicja in both her capacity as the surviving spouse and the administrator of Bogusław’s estate, on 25 February 2019, the superannuation trustee proposed to pay 100% of the death benefit to Alicja in her capacity as the administrator of Bogusław’s estate.
The Court found that, “By accepting the grant of administration [Alicja] was obliged to subordinate her claim to the death benefit to that of the estate”, however in light of the animosity and distrust between the potential beneficiaries on intestacy, being Alicja and the defendants, coupled with Alicja’s desire to lodge an objection to the superannuation trustee’s latest decision, the Court made orders revoking Alicja’s grant as the administrator of Bogusław’s intestate estate and appointed an independent solicitor.
Above all, the Court recognised that this case “highlights the importance of making wills and making binding beneficiary nominations in respect of superannuation benefits”… a topic also at the centre of Katz vs Grossman.
Read the full case ‘GONCIARZ vs BIENIAS  WASC 104’.