Question:
My father died 8 years ago and we are 4 children who were all minors at the time of his death. The trustee is my father’s brother, who neglected to inform us of the retirement annuity fund which my father had. Now, 8 years later, we found out about it, and our ages are: my brother (24), myself (25), my sister (22) and last born sister (16). My 16 year-old sister is the last child still in the house as the rest of us are already married. My father only had 4 children with my mother, they then divorced and he married again and so did my mother. My father died 5 years later, but had no children with his second wife. My mother is the beneficiary of the policy. How is the money shared?
Answer:
Azeezah,
Your question informs just how complex this area of retirement fund law and administration can be. You do not provide enough information, for us to attempt a specific answer to this question. First off, we need to know what happened to the retirement annuity after your father died. Was it paid out, possibly into the trust? Or was the provider not informed of your father’s death, and they simple made the retirement annuity paid-up?
The golden rule is that a retirement fund death benefit (be it a work place fund or a retirement annuity), must be used to provide for the deceased’s financial dependents. It is the responsibility of the fund trustees to a) determine those dependents and b) allocate the money as they deem appropriate. Although your late father nominated your mother as the beneficiary, the trustees are not obligated to follow the nomination.
If the retirement annuity death benefit has not been paid out, the trustees will still have the task of allocating the funds. We would not wish to pre-empt their decision; we suspect that will consider who is (or would have still been) financially dependent on your father has he passed now, and allocate accordingly.
