Many in retirement are travelling comfortably, with three key factors contributing to their happiness – good physical and mental health and enough money to enjoy life.
Perhaps the assumption that markets are still anchored by predictable economic policies needs to be challenged. For the first time since the fall of the Berlin Wall, political volatility – once background noise – is potentially reshaping investment risk at a structural level.
AustralianSuper loses bitter family court row over super benefit
Six children have won a case against AustralianSuper, the nation’s largest superannuation fund, overturning a decision to award their deceased father’s entire retirement savings to his allegedly “heavy-drinking and abusive” wife.
The children claimed their father had taken out a violence restraining order against his wife because of fears for his safety, and had planned to change his will so that they received his superannuation benefits, the Federal Court was told.
Lawyers claim the decision highlights the need to regularly update a will to reflect changes in personal and financial circumstances, particularly where there is a planned divorce, other relationship breakdowns or illness.
Separation and Divorce Advisors’ Jacqueline Wharton says: “Your will should reflect life events, such as changing relationships or changes in personal circumstances. That means it needs to be reviewed and changed as circumstances change.”
It also highlights a common misconception about estate planning, says Andrew Meiliunas (pictured), an associate director of law firm Nevett Ford.
“Super is not automatically covered by your will,” he says. “A deceased estate is governed by the person’s will. But a super fund must be given specific instruction by a death benefit nomination.”
Anna Hacker, client director at Pitcher Partners, warns family disputes about wills and estates have jumped more than 80 per cent in the past decade as the number of “blended families” increased.
Resolving those disputes can take years, involve huge legal fees and cause irreconcilable breakdowns in family relationships, she warns.
The recent Federal Court decision was about who should receive $170,000 invested in the AustralianSuper account of Richard Lynn, who died of natural causes on December 30, 2021.
His wife, Consuella, was seeking to overturn a previous decision by the Australian Financial Complaints Authority (AFCA) that rejected the AustralianSuper trustee’s initial decision to give her Richard’s benefits.
AFCA is an independent tribunal that resolves disputes between consumers, small business and finance companies.
Richard, who married Consuella in September 2007, had four daughters: Christina, Sarah, Bethany and Kate. He also had two stepsons who were Consuella’s sons: Tye and Ben. The six children are all adults.
The couple separated and lived separately from 2018. A “few attempts” at reconciliation up to the following March had failed, the court was told.
The couple were legally married at the time of his death, despite steps being taken by Richard to begin divorce proceedings.
Despite their estrangement, Richard’s will, which was made in 2019, named his wife as the beneficiary of his estate, although he later sought to revoke this.
The court was told Richard had emailed his daughter, Kate, in December 2021, stating that he had taken out a violence restraining order against his wife that was valid until the following March when he hoped to have the divorce finalised.
“This is when I hope to have everything sorted out. It will force her to behave, and she can’t come near me or be abusive or she will be arrested,” Richard wrote.
The court was also told Consuella was subject to mood swings, threatened him and his daughters, drank heavily and prosecuted “frivolous” legal actions.
The daughters had no relationship with their mother for several years, the court was told.
Christina told the court: “Ethically, it is not right that someone who feared for their safety and needed to go as far as to get a violence restraining order put in place to protect themselves should then have their wishes overlooked and the insurance that was put in place to support their children granted to this person. Children, regardless of age, are recognised as dependants.”
The wife, Consuella, said she was an unemployed disability pensioner who was financially dependent on her husband. She had taken out a restraining order on Richard the day he died.
Richard had signed a non-binding death benefit nomination in February 2018, directing that his superannuation benefits be divided among his six children. This nomination excluded his wife.
Death benefit nominations in super may be binding or non-binding. A binding nomination means the super fund must pay the money to those nominated in the amounts specified.
A non-binding nomination gives a fund power to refer to the scheme members wishes but retain discretion where the money is paid. Many funds only offer non-binding nominations.
“Although non-binding, this nomination was an important factor, as superannuation typically does not form part of a deceased’s estate,” says Meiliunas.
“Despite Richard’s intentions, the AustralianSuper trustee ignored the non-binding nomination and allocated the entire superannuation benefit to the wife.”
The AFCA found that it was unreasonable to exclude the children from receiving any of the superannuation benefits, ruling the benefit be split between 50 per cent to the wife (to help settle joint mortgage obligations) and the remainder among the six children.
On appeal, the Federal Court Justice rejected Consuella’s claim that AFCA had wrongly assumed there were any expectations of financial support for the children, upholding AFCA’S earlier ruling that overturned the AustralianSuper trustee’s decision to distribute the entire superannuation benefits to Consuella.
