A recent case (McIntosh v McIntosh [2014] QSC 99), considered the operation of section 52 of the Succession Act 1981 (Qld) which deals with the duties of a personal representative to a deceased individual. This case also considered fiduciary duties as administrator of an intestate estate.

 

The circumstances of this case were such that James McIntosh died intestate (without a valid Will being in place). His mother was appointed as administrator of the estate where she sought payment of the superannuation death benefits to herself, arguing that she should retain the benefit of all of the superannuation instead of accounting to the estate for these monies (which would then be divided equally amongst the parents under the intestacy rules).

 

Section 52 sets out a number of duties required by a personal representative, one of these duties being to ‘collect and get in the real and personal estate of the deceased and administer it according to law’.

 

James’ mother was appointed administrator by the court (as opposed to being appointed by a testator, which in specific circumstances may give rise to an exception to the general rules around conflicting personal interests and fiduciary duties, see Mordecai v Mordecai). Her intention to pay herself the total amount of superannuation monies, did not come to light until after she acquired the fiduciary duties conferred to her as Administrator.

 

In such circumstances, there was a clear conflict of duty and interest to her fiduciary duties as Administrator of the estate. As administrator she had a duty to apply for payment of superannuation funds to the estate, thus requiring them to be divided equally between herself and her ex-husband, pursuant to the intestacy rules.

 

By applying to the superannuation funds in question to have all the monies paid to her personally, rather than to the estate, she was putting her own interests ahead of her duties as legal personal representative as well as breaching her fiduciary duties as administrator of the estate.

 

She was ordered to account to her sons estate for the superannuation benefits in question.

 

There is different wording in the legislation in Western Australia, however Part 6 of the (Guardianship and Administration Act 1990) deals with Estate Administration. In particular section 70 provides that ‘’An administrator shall act according to his opinion of the best interests of the represented person..” which confirms the ongoing fiduciary obligation associated with that role.

 

As can be seen from the case above, estate and succession planning is a complex area for which we recommend seeking advice from experienced and qualified advisers. Should you have any queries at all, please don’t hesitate to contact us.

Bruce Havilah

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