Superannuation death benefits continue to be problematic for executors - Brine v Carter [2015] SASC 205

Posted by: Kylie Shaw

Professor Brine was in a de facto relationship with Ms Carter when he passed away. His Will named Ms Carter, along with his three adult sons from a previous relationship, as joint Executors of his Estate.

In his will, Professor Brine provided a life interest for Ms Carter in his principal residence and another property and gave the rest of his estate to his three sons and grandchildren.

Professor Brine had two superannuation accounts with UniSuper. One account was structured so that the only beneficiary of that superannuation could be a spouse. The second was an accumulation account from which a spouse, child, dependant or the member’s Estate could benefit.

Rather than making a binding death benefit nomination with UniSuper, Professor Brine had written a letter to them expressing his wish for the beneficiary of his superannuation to be his Estate. This was recorded with UniSuper however, given the form it was in, it was not enforceable.

Ms Carter learnt of the two superannuation accounts following Professor Brine’s death, and made applications to UniSuper to have the balance of each account paid directly to her.

For some months, Ms Carter was found to have failed to disclose the extent of the super benefits to the three sons and that the estate and each of them was a potential beneficiary of one of the accounts.

Once the sons found out about the super and the potential to claim, the three sons claimed the benefit as executors of the estate. Notwithstanding their claim, UniSuper exercised its discretion in favour of Ms Carter.

The Court found that, despite the misrepresentations made by Ms Carter and breach of her fiduciary duties as an executor up to the point in time when the three sons discovered her deceit, thereafter the actions of the sons in making a claim on behalf of the estate (without Ms Carter's involvement) effectively meant that they had accepted that she was not acting as an executor in the matter so that she was therefore entitled to pursue her claim for payment in her own personal capacity and not as a co-executor. Since she was no longer acting as an executor, she was therefore not in breach of her duties as such, and therefore was entitled to receive the payment herself without having to account to the estate for it.

Ironically, if the three sons did not make a separate competing claim (which effectively operated as a consent to Ms Carter claiming in her own right), she would have been held to be in breach of her duties as an executor and would have had to pay the money to the estate. As a result, despite Ms Carter's dishonest conduct, she won the case.

This case illustrates the importance of a valid binding death benefit nomination if you have specific wishes as to how your death benefit should be paid by the trustee of the Fund, as well as some of the issues that arise for executors who are also beneficiaries in claiming those death benefit payments.

Solicitor's duty to intended beneficiaries

Posted by: Kylie Shaw 

The High Court will hear an appeal against a decision of the Supreme

Court of Tasmania on the professional duties of lawyers in the context of a will dispute. The appeal is scheduled to be heard on 2 March 2016.

This case concerned the possible duties of a solicitor, when preparing a will for a client to take instructions and give advice as to the circumventing of the provisions of Testator's Family Maintenance Legislation ("TFM").

In Calvert v Badenach [2015] TASFC 8, Mr Badenach, a solicitor, took instructions to prepare a will for Mr Doddridge (the deceased) who at the time, was terminally ill. The deceased’s instructions were to pass his entire estate to his step son, Mr Calvert. Mr Calvert was the son of the deceased's long-term partner. However, when the deceased died six months later, the Mr Calvert did not receive all of his half-share of two real estate properties the pair owned, because the deceased's long estranged daughter successfully sued the estate under Tasmania’s family maintenance statute for $200,000 (and also recovered the costs for her action from the $600,000 estate.)

So, Mr Calvert sued the solicitors who prepared the deceased's will in 2009, arguing that they should have advised the pair about the possibility of such a turn of events, which could have been avoided by converting the pair’s shared ownership in the properties from ‘tenancy in common’ to ‘joint tenancy’ (so that the deceased's half share would have gone directly to the Mr Calvert, rather than via his estate).

Mr Calvert was unsuccessful at first instance. The decision was appealed and Mr Calvert was successful.

On appeal all three judges agreed that the Solicitor owed a duty of care to the deceased not only to enquire of the deceased whether he had any children, but to advise him why the enquiry was being made, the potential for a family provision claim, the impact it would have on his wishes, and any possible steps he could consider to avoid that impact. In the circumstances the solicitor's duty extended to not only asking questions that might elicit the existence of possible claimants but to advising about mechanisms to minimise the estate available to meet any claim.

Their Honours all agreed that this was a case of loss of opportunity or chance.  The Solicitor's negligence caused Mr Calvert to lose an opportunity to obtain a better outcome.

Final Day - Rockhampton, Succession Roadshow

Posted by: Kylie Wilson 

We had the last day of the very successful succession and continuity roadshow in Rockhampton on Thursday.  There were some interesting questions in relation to keeping the business separate from high value assets like land, and Frank Ricci of Entello Group, at the request of one participant, spent some time explaining the ins and outs of off-market shares. 

Almost all of the Lawrie family attended the Rockhampton session, and again told participants their courageous story of overcoming distrust and emotional heartache to come through the succession process as a very close-knit, happy and supportive family. 

Claudia Power again imparted her amazing wisdom, having been through a very difficult situation with her father's Will, both as a young child and later with the succession process as a young woman.  This has taught her the importance of succession planning early and she has used those skills for her own immediate family succession in more recent years. 

John Moore from RCS gave some really valuable tips to participants arising from the lessons he's learned in his own very difficult succession process as a grazier and farmer of a multigenerational primary production business in South Africa.  Kate Murfet of RCS spent most of the roadshow with us and is one of the nicest and most creative people I've ever met. 

Frank Ricci, Tony Garnham and Belinda Piccirillo, all from Entello Group, provided some fantastic advice to primary producers about the options for off-farm investments, a very important consideration if succession planning is to progress smoothly.  I have to say, if I ever dab my toe in the share market again, these guys will be the first people I call. 

Andrew McCormack of Best Wilson Buckley Family Law not only did a great job of overcoming many participants' initial prejudice about financial agreements, by showing clearly the advantages for both parties in a relationship of having clarity, rather than the uncertain and expensive process of having a family court decide, in the event of a marriage breakdown.  He also imparted some absolute gems from his role as executor, in one case in relation to a Will that had not been updated appropriately, causing a huge amount of distress to the beneficiaries left behind.  It again highlighted the importance of ensuring that Wills are updated on a regular basis and further, that a Will is only part of the succession plan - it should never be the entire succession plan.

I have to say that it has been an absolute pleasure and a privilege to work with so many wonderful and inspiring people, both my fellow presenters during this roadshow, and the committed families who came for the purpose of obtaining information on how to transition multigenerational businesses while maintaining family harmony.

I'm now on the long road from Rocky to Brisbane and I have just passed, quite seriously, the longest coal train I've ever seen in my life, and I have seen rather a lot of them in my time.  The mining boom might be over but between the coal trains and the explosive trucks I've passed, it is clear that the process of mining itself up this way is still continuing. 

I have very much enjoyed my time in central Queensland and am now looking forward to getting home.

Day 4 - Succession Roadshow, Biloela Session

Posted by: Kylie Wilson 

The Biloela session of the rural succession and continuity roadshow saw good numbers again comprised of families wanting to demystify the tips and traps of rural succession planning.

John Moore of RCS gave some very interesting insights into being a sixth generation farmer on the land in South Africa.  There were also quite a few questions and concerns around the issues of gifting land to the next generation, and the duty implications where Queensland continues to remain behind the other states in assisting primary producers to pass land so the next generation can remain on the land.

The themes of lack of communication and a desire to maintain family harmony continued and reflected those that we'd heard in Emerald.  Aims of getting started early and achieving security whilst ensuring a comfortable retirement for parents also came through strongly from the younger generation. 

We then headed out on the road again for Rockhampton.  Another interesting and informative session in Rockhampton awaits before the long trip back to Brisbane.

Day 3 - Succession Roadshow, First succession and continuity session in Emerald

Posted by: Kylie Wilson

We had the first day of our succession and continuity roadshow in Emerald with RCS, Entello Group and Andrew McCormack of BestWilson Buckley Family Lawyers.

The session was very well attended, and there were some very impressive discussions from Simone Lawrie of the Lawrie family and Claudia Power about their own personal succession journeys, which illustrated how positive it is for families if the succession process is done properly.


RCS gave some good insights on how to get family meetings started and keep them progressing, Entello Group provided some valuable share tips, and Andrew McCormack talked about the advantages of binding financial agreements where there are concerns about marriage breakdown during the succession process.

It was a great pleasure for me to speak to so many committed families, with the overall message of the day from participants being an aim for family harmony in achieving intergenerational transfer.

After the completion of the Emerald session, we all set off in cars for the trip from Emerald to Biloela, where the land continues to look in very good shape, and I'm looking forward to talking to more families in Biloela on Wednesday.

Aims of older generation vs younger - some very similiar

Homemade Wills can be very costly

Posted by: Kylie Shaw

Homemade Wills can be very costly to your loved ones and may result in your wishes and directions not being followed. Increasingly, we are seeing applications to the Court in relation to Wills that do not comply with the necessary requirements to be a valid Will [known as an informal Will].

Recently, the Queensland Court of Appeal considered an application for approval of an informal Will for the first time, in Lindsay v McGrath [2015] QCA 206.

In that decision, the Queensland Court of Appeal determined that an informal document which stated “… for the purpose of making the Will of Nora Priscilla Lindsay” was not a valid Will.

As a result, the Will could not take effect and the Nora Lindsay’s wishes in the document could not be carried out.

In this case, Nora Pricilla Lindsay had two children, her son, Geoffrey Lindsay and her daughter, Heather McGrath.

Nora decided to make a document herself which looked very much like a Will leaving the bulk of her estate to her son, Geoffrey. She specifically provided for why her daughter, Heather should not receive anything from her estate and provided the reasons why she was disinheriting her.

Nora Pricilla Lindsay died on 16 October 2012 and two court cases later, the Court held that the document was not a Will.

At first instance, the primary judge found that whilst the handwritten document contained a bequest of Nora’s property to her son, Geoffrey, that statement in itself was insufficient to satisfy the requirements of a valid Will.  The primary judge formed the view that the document was to be "for the purpose of making the Will" rather than the Will itself.

The issues with the document were highlighted as follows:

1. First, the document contained the words "for the purpose of making her Will";


2. The handwritten document did not accord with Nora's conversation that she had with her son Geoffrey in 2008 that she was leaving "everything" to him. There were specific exceptions attached to the document but they had been torn off from the document;


3. There were alterations contained in the document;


4. The document did not deal with all of Nora's estate;


5. Nora wrote her name but was not in the form of a signature; and


6. The document was not witnessed.

On Appeal, the court found that the evidence placed before the primary judge, at best, established that it was Nora’s intention that her son, Geoffrey receive the benefit of her estate with her daughter Heather to receive nothing. However, the evidence did not establish, that the handwritten document, in that form, was intended by Nora to form her last Will. The Appeal was dismissed.

As Nora had revoked her previous Will, her children shared equally in her estate pursuant to the laws of intestacy.

Although preparing an informal Will might sound like a cost effective way to prepare your Will, there is no guarantee the document will be valid. Making an application to the court to validate a will which does not comply with formal legislative requirements is very costly and far exceeds the costs of having a Will prepared in accordance with the legislative requirements. 

Day 2 - Succession Roadshow, Roma to Clermont and back to Emerald

Posted by: Kylie Wilson

I headed out of Roma early on Monday morning.  A minor disagreement with a kangaroo just outside of Injune (from which both my car and the kangaroo emerged unscathed) reminded me why every car on the Dawson Highway, including the Kia Carnival that I passed outside of Rolleston, have bullbars almost bigger than the cars themselves.  The nudge bar on my Isuzu D-MAX seems rather puny by comparison. 

It was great to see the land on this section of the trip in as good a shape as the land further east, with some truly spectacular scenery in the central highlands between Injune and Rolleston, which included two of the biggest eagles I've seen for quite a few years.  Fortunately that wildlife chose to get out of the way of the car, because I'm sure my car would have come off second best from a tangle with a pair of birds whose wingspan is almost as wide as the road. 

The Dawson Highway between Rolleston and Emerald supported what many clients have been telling me about the fact that whilst there has been some good rainfall in many areas, it is certainly not universal, with some pockets clearly showing slightly less rainfall than that received further south.

I headed further north past Clermont and was very fortunate to be given a tour of a long-standing client's cattle property.  It was fantastic to see it so green with plenty of feed after decent rainfall in January, given they tell me that the early part of summer in that area was very tough. The feeling of relief that rain had finally come to their property was evident.   After that tour and a quick cup of tea, I headed back to Emerald to get ready for the first of the succession conferences in Emerald on Tuesday, with good numbers already registered.