When Sally’s husband Mike died unexpectedly, Sally’s world was instantly turned upside down.
Apart from the devastating personal loss, Sally was confronted with dealing with Mike’s estate – which included the family home and some bank accounts.
Mike also had a sizeable Super Death Benefit, with a life insurance component – for which Mike had not nominated any Beneficiary.
Sally was in a state of utter disbelief to learn Mike had no Will and she would have to elect whether she would:
- be in charge of the administration of Mike’s estate; or
- leave that role to someone else (who?) and apply for Mike’s Super to be paid to her personally.
She was prohibited from doing both.
Even worse:
- Sally would potentially have to “compete” against her children, some of whom were under 18, for the payment of Mike’s Super;
- there would be different outcomes financially (given various tax considerations) if Sally received the Super or her older children did;
- Sally would not receive all of Mike’s estate, with the Intestacy Rules requiring it to be
split between her and her children – including the family home.
A nightmare!
Although the names are fictional, the scenario is real. It happens often.
What would you have advised Mike?