It is estimated that up to 50% of Australians do not have a valid Will in place. When a person dies without a Will, their Estate is governed by what are known as the intestacy provisions in the Administration and Probate Act. These provisions allow the Estate to be administered in the absence of a Will and set out the chain of entitlement to the deceased’s Estate. While dying without a Will would not leave your Estate ‘in the lurch’ indefinitely, relying on the intestacy provisions instead of making a Will may lead to unintended consequences.

The Intestacy Provisions

For a person who is married or whose spouse has predeceased them, and who had children with only one partner, the order of succession is as follows:

  1. Partner
  2. Children
  3. Parents
  4. Siblings
  5. Grandparents
  6. Aunts, uncles or cousins.

Where there is more than one person in a category (e.g. multiple children), the Estate is divided between those who survive the Deceased by at least thirty days. The exemption is where the Estate is to be divided between children and one child has predeceased the Deceased.

For example, say Paul had three children: Ron, Meg and Stephanie. Meg unfortunately predeceases her father, leaving two children of her own. Ron and Stephanie will each receive one-third of Paul’s Estate and the remaining third, which would have been distributed to Meg, is split between her surviving children. This may be what Paul intended or he may have wished to distribute his Estate differently; for example, Ron may have been in a poorer financial position than his sisters and Paul may have thought him deserving of additional benefit from the Estate.

Important: the Administration and Probate Act as amended in 2017 now provides that, where there are no relatives beyond aunts, uncles or cousins, the Estate is deemed to be the property of the Crown. This is different to previous provisions which allowed more distant relatives to claim the Estate. This underscores the need to make a Will, particularly if you have few living blood relatives who could inherit your Estate on intestacy.

For a person who has a partner, but children from a previous relationship, the rules vary slightly. The partner is entitled to what is known as the ‘Statutory Legacy’ amount, plus the Deceased’s personal chattels, interest, and one-half of the residuary Estate (whatever is left). The Statutory Legacy amount is currently $499,210. The Deceased’s children from the prior relationship share in the other 50% of the residuary Estate.

Say Paul has a partner, Rose, who is not the mother of Ron, Meg and Stephanie. Paul dies with assets worth $1 million in his Estate. From the Statutory Legacy, plus the interest and the chattels, Rose will receive approximately $500,000. She will also receive a further $250,000, being one-half of the residuary Estate. Ron and Stephanie would then receive one-third of $250,000 each, and Meg’s children would receive one-sixth.

Again, this may accord with the Deceased’s intentions, but the intestacy provisions can lead to disappointment. In this scenario, the Deceased’s spouse is essentially receiving three-quarters of his Estate, with only a quarter to divide between his children and grandchildren. Furthermore, if a Deceased’s total Estate is less than the Statutory Legacy, their partner is entitled to the entire Estate. This leaves their children from a previous relationship with nothing, which is unlikely to be what the Deceased wanted.

Letters of Administration

In the absence of a Will appointing an Executor, someone must apply to the Supreme Court for Letters of Administration of the Deceased’s Estate. This is usually one or all of the people best entitled to share in the Estate (e.g. the Deceased’s spouse or children). While the process of applying is similar to that of an application for Probate of a Will, there can be additional complications. Children of the Deceased may have to provide additional documentation to prove their paternity, for example, if the Deceased and their mother were not married.

Situations also arise where the persons most entitled to the Estate cannot act as Administrators because they are minor children or because they are incapacitated, so another person must prove to the Court that they are the most appropriate Administrator. These issues are not insurmountable but create an additional challenge for the family of the Deceased that could have been avoided.

The only way to ensure your wishes are carried out after your death is by making a legally-binding and properly drafted Will. A formal Will not only gives you peace of mind, knowing your Estate is to be distributed as you have directed, but also relieves the burden on your loved ones after your death. Our experienced team can assist with preparing Wills covering a range of family scenarios, tailored especially to your situation and wishes. Contact us today to arrange a no-obligation meeting.