If you die without a Will, you are said to die “intestate”. There is legislation to determine who will receive your assets if you die intestate. It is important to note that the intestacy laws vary between states and territories within Australia. The information provided here relates to the law in New South Wales. If some or all of your assets are outside of New South Wales and/or you reside outside of New South Wales, then different laws may apply to part or all of your estate.
Who will receive your assets if you die without a Will?
Relatives left by the deceased
Who is entitled
|Spouse and no children||The spouse receives the entire estate|
|Spouse and children, where all children of the deceased are also children of the spouse (ie. The deceased had no children from another relationship)||The spouse receives the entire estate|
|Spouse and children, where one or more children of the deceased are from another relationship||The spouse receives:|
· the personal effects of the deceased
· a statutory legacy, being an amount of money which increases over time with the CPI. The base amount set by the legislation was $350,000 as at December 2005, but after applying the CPI increases the amount is currently over $450,000
· one half of the remainder of the estate
All of the children of the deceased share equally in the other half of the remainder of the estate.
|Children and no spouse||The children are entitled to the whole estate in equal shares. If a child has predeceased but has a child or children surviving, those children (being grandchildren of the deceased) are entitled to the share their parent would have taken. If any of those grandchildren predeceased leaving a child or children surviving then those children (being great grandchildren of the deceased) are entitled to the share their parent would have taken, and so on.|
|No spouse, no children, no grandchildren, no great grandchildren etc surviving||The parents of the deceased are entitled to the whole estate in equal shares. If only one parent survived, that one parent will receive the whole estate.|
|No spouse, no children, no grandchildren etc and no parents surviving||The brothers and sisters of the deceased are entitled to the whole estate in equal shares. If a brother or sister has predeceased but has a child or children surviving, those children (being nieces and nephews of the deceased) are entitled to the share their parent would have taken. If any of those nieces and nephews predeceased leaving a child or children surviving then those children (being great nieces and nephews of the deceased) are entitled to the share their parent would have taken, and so on.|
|No spouse, no children, no grandchildren etc, no parents, no siblings or nieces and nephews surviving||The surviving grandparents are entitled to the whole estate equally. If only one grandparent survives they will receive the whole estate.|
|No spouse, no children, no grandchildren etc, no parents, no siblings, no nieces and nephews, no grandparents surviving||The surviving Aunts and Uncles of the deceased are entitled to the whole estate in equal shares. If an Aunt or Uncle predeceases but has a child or children surviving, those children (being first cousins of the deceased) take the share their parent would have taken.|
|No spouse, no children, no grandchildren etc, no parents, no siblings, no nieces and nephews, no grandparents, no Aunts and Uncles, no first cousins||The State of NSW (ie. the Government)|
Some important things to note:
- A spouse includes not only a married spouse, but also a defacto spouse. To be entitled as a defacto spouse the relationship must have been in place for at least 2 years up to and including the death, or if the relationship was for less than 2 years up to and including the death, must have resulted in a child. A spouse also includes a person who was in a registered relationship with the deceased (that is, a relationship registered under the Relationships Register Act (2010)).
- The law recognises that a person may have more than one spouse. As an example, a person may be separated from the person to whom they are married, and they may be in a long term defacto relationship. Where there is more than one spouse entitled to the estate, the spouses share the estate (or that portion of the estate to which the spouses are entitled), although not necessarily in equal shares. The spouses can attempt to reach agreement on how much they each receive, or the Court can decide.
The above is a general overview of what happens if you die without a Will. As you can see, it can become quite complicated. This makes it all the more important to have a Will, to ensure you have a say in who gets what, and to lessen the chance of disputes arising.
Who will be responsible for looking after your estate if you die without a Will?
When you make a Will, you choose who will be responsible for administering your estate – your Executor. When you die without a Will, you haven’t made this choice and there may be uncertainty regarding who will administer your estate.
Usually one of the people entitled to your estate as a beneficiary will apply to the Court seeking the Court’s approval to be appointed as your Administrator (when you die without a Will the person responsible for administering your estate is known as your Administrator rather than your Executor). There can be disagreements between the beneficiaries as to who should take on the role. Generally, the person with the most right to be your Administrator is the person with the biggest interest in the estate – the main beneficiary. However, it’s not certain that the main beneficiary will be given the responsibility – this is up to the Court. Where beneficiaries share equally in the estate, it can sometimes be difficult to agree upon or determine the most appropriate person to be the Administrator. If the beneficiaries can’t agree, the Court will have to decide.
If you are happy with how your estate would be distributed on intestacy, why should you bother making a Will?
There are a few reasons why you should still make a Will even if you are happy with how your estate would be distributed on intestacy. Some of these reasons are:
- Your Will doesn’t only deal with your assets. If you are a parent with children under 18 years of age, your Will should include a provision appointing a guardian for your children. The guardian is responsible for the welfare of your children when you are no longer around.
- There may be sentimental items you want to leave to specific people, like jewellery, photos and other family memorabilia. The laws of intestacy don’t provide for this.
- The process of applying to be the Administrator of the estate is more complicated than the process of an Executor applying for probate of a Will. There is the issue of working out who will apply to be the Administrator, but there are also other added complexities. The proposed Administrator has to provide documentation to the Court from relevant authorities (such as the Registry of Births Deaths and Marriages) to prove who the next of kin are. Sometimes this is not easy – particularly if the deceased person or certain of their relatives have lived in other states or countries over the years. Also, as part of the application to administer the estate the proposed administrator has to obtain consent from the other beneficiaries, and if the consent isn’t forthcoming they need to serve a notice regarding their application on the beneficiaries.
- In some cases the proposed administrator has to give a “bond” to the Court. This is a promise to administer the estate according to the law. A bond needs to be backed by sureties – these are people who are prepared to guarantee the Administrator’s proper performance. Usually two sureties are required and they must provide information to the Court regarding their assets, to show they are able to make good on their guarantee if the Administrator does the wrong thing. This process is onerous and it can very difficult to find people willing to act as sureties.
To get started on making your Will and other estate planning documents, contact our Estate Planning team on 02 4929 3995 or at email@example.com.