  We report muon spin relaxation and inelastic neutron measurements on the
Heusler system YbPd$_2$Sn. Localised anisotropic and quasi-elastic Yb magnetic
fluctuations are observed below $T = 150$K. Both $\mu$SR and neutron data
indicate a slowing-down of the spin-fluctuations, upon lowering the
temperature, similar to that observed in Kondo lattices. The temperature
dependence of the quasi-elastic neutron signal is compatible with a
crystal-electric field scheme having a $\Gamma_7^{\rm CEF}$ ground state. The
muon depolarization rate exhibits an additional contribution upon decreasing
the temperature below $T_{\rm c}$ suggesting a close interplay between magnetic
fluctuations and the superconducting state.
