If you don’t have a will when you die, then your assets will be distributed in accordance with the law. Dying without a valid will is known in law as dying “intestate”.
For example, if you die intestate and leave a spouse or domestic partner and kids, then your spouse or domestic partner will receive the first $100,000 of your estate plus one half of the balance. The other half of the balance will be shared equally between your kids. If your kids aren’t adults, then there inheritance will need to be paid to Public Trustee to manage it on their behalf.
If you don’t have a spouse or domestic partner and kids, then your estate will pass to your parents equally. If no parents, then to your siblings equally. If any of your siblings have died leaving children of their own surviving, then those children will take equally their parents share. If no siblings, nieces and nephews, then to your grandparents; and if no grandparents then to your parents’ siblings. If any of your parents’ siblings have died leaving children of their own, then those children will take equally their parents’ share.
If there is no person alive who is entitled to inherit by law then your estate will pass to the Crown.
Below are some of the most problematic issues that can arise if you die intestate.
- No will, no choice. The law has done the deciding for you. Too bad if that’s not what you wanted or you had, for example, promised your grandson he would get the war medals when you died.
- “Domestic partner” is not just a legal term that a person can choose to apply to them self if they were in a relationship with you – they need to either produce a certificate issued by the Registrar of Births Deaths and Marriages that they were in a registered relationship with you, or apply to the Court seeking to be declared as your domestic partner – and this requires forms, affidavits to prove the relationship, court filing fees and so on (in other words, the last thing a person would want to be dealing with when they have just lost their partner).
- The first $100,000 and half of the balance goes to the spouse or domestic partner and the other half to the kids. What if your main asset is the family home and you own it in your sole name? Your spouse or domestic partner is suddenly put in a position of having to consider whether he or she will need to sell the family home, buy out your kids’ entitlement or come to some lawful agreement with your kids (and fingers crossed your kids are capable adults so they have the capacity to make and sign an agreement!).
- Are minor children inheriting? Their entitlement will need to be handed over to Public Trustee to manage. And yes Public Trustee are entitled to charge a fee and make decisions about when or if some of the money could be released to those children for their maintenance, education or advancement. The parents, for example can however make an application for someone other than Public Trustee to hold the funds on their behalf instead, but again, paperwork, affidavits, court filing fees… (In other words, more stress and work in a time that is already difficult enough).
- Hotchpot! If a person dies without a will and made a gift to someone within the last five years (other than a spouse or domestic partner) who would inherit under the law then that gift will be taken into hotchpot, which means it will be taken to have been given in satisfaction of that person’s entitlement. For example, if you gave (not loaned) one of your children $50,000 two years ago because they fell on hard times and then you die without a will, that child will now get $50,000 less upon your death.
- No will, no executor. So who’s in charge of collecting your assets, paying your bills and distributing your estate? Well, that’s up to the law. Again, no will, no choice! The law will decide. In most instances, it will be the person who is entitled to the largest share of your estate. You better hope they’re trustworthy, responsible, ready for some hard work and efficient. Oh, and patient too, because it can be a lot harder for them to deal with banks and other businesses when there is no will appointing them specifically as your legal personal representative upon death.
I could go on. I have many examples of the difficulties that have been caused by someone dying without a valid will. Death is hard enough, don’t make it any harder.
Contact Turner Freeman to arrange a confidential and obligation free discussion about Will & Estate and also to understand your rights and legal options. We can help. Let’s chat. Call us on 8213 1000.