By Darryl Browne -
Snapshot
- A Legal Personal Representative (‘LPR’) has a fiduciary duty to collect the deceased’s estate for beneficiaries.
- If the deceased was a member of a super fund, the duty will usually extend to collecting any death benefit for the estate.
- If the LPR is able to apply for the death benefit personally, a conflict of interest may arise, which will not be negated simply by reason of the person being named the executor.
- The conflict may be allowed by express permission in the will or it could be avoided by the person renouncing probate or not seeking a grant of representation.
A common scenario is a spouse applying for a member’s superannuation death benefit after the member’s death. Often, the spouse is also the member’s executor.
The inherent difficulty with this common occurrence is that an executor has a fiduciary duty to collect the assets of the member’s deceased estate for the member’s beneficiaries. The rules for many superannuation funds allow the member’s death benefit to be paid to the member’s legal personal representative, which, if the member has left a will, is the member’s executor. So, the spouse (or any other person able to apply for the death benefit and act as the deceased member’s legal personal representative) may have a conflict between their personal interest in seeking the death benefit and fiduciary duty to seek the benefit for the estate as the member’s legal personal representative (‘LPR‘). This much appears from Brine v Carter [2015] SASC 205 and a number of decisions involving estates where there is no will but the spouse is appointed the administrator. These cases are considered below but first of all, it is appropriate to reflect on the content of the conflict rule.
