Wills Month Series - Dying without a Will. What happens to my estate?

If you die without a Will, dying intestate, who receives your estate varies depending on your individual circumstances. The Administration Act 1969 creates rules that dictate ‘who gets what’ in such situations (Administration Act rules). The outcome of this process, however, may not match up with what you had intended, so it is always better to take control of the distribution of your assets by making a Will.

Below are a couple of examples of the Administration Act rules in action.

• You have a spouse or partner, but no children or parents. In this case, your spouse receives your entire estate.
• You have a spouse or partner and children. In this case, your spouse or partner will receive:
• your personal chattels;
• $155,000; and
• 1/3 of the remainder of the estate.

Your children will receive the remaining 2/3 of the estate.

• You have a stepchild or stepchildren. In this case, they may be entitled to a portion of your assets. But that depends on the nature of their relationship to you, whether or not they relied on you for financial support and their age.

In all cases, if you die leaving behind a spouse or partner, they can choose to accept the distribution of your estate as per your Will if you have one or as per the Administration Act rules if you don’t have one (option B), or ask the Family Court for a half share of the relationship property (option A). That choice needs to be made within 6 months of the grant of probate (the court approving the Will) or letters of administration (the court appointing an administrator where there is no Will) and the timeline is a strict one. If no choice is made option B will apply.

Option A requires a costly and potentially contentious legal process which can be hard on the surviving spouse or partner. But it may be necessary where the Administration Act rules do not award them their fair share of your estate. For example:
You have one adult son with your spouse. As a result of a family argument some years ago, your son is now estranged from the family. You don’t have a Will, so upon your death the Administration Act rules apply. Your spouse receives your personal chattels, $155,000.00 and 1/3 of the remainder of your estate. Your estranged son receives the remaining 2/3 of the estate. In order for these amounts to be paid any estate property would need to be sold and the proceeds of sale distributed accordingly. That could leave your spouse or partner literally out in the cold searching for a new property with a significantly reduced purchasing sum.

With the above example in mind, it is clear that preparing a Will which appropriately looks after your partner or spouse is a sensible way of ensuring you don’t lump them and other family with any unnecessary stress following your death.

Similarly, the way in which you own property with another person may result in unanticipated outcomes and cause issues following your death. If you own property as a joint tenant with another person, your interest in that property will pass directly to the surviving property owner on your death. It will not constitute part of your estate to be distributed by your Will or the Administration Act rules. If you intend for your share to go to someone else, then you need to change your ownership to a tenancy in common. This will ensure your share in the property remains separate upon your death and can be distributed in accordance with your Will or the Administration Act rules. That distribution is of course, still subject to any right your spouse or partner may have to make a claim to the Family Court for 50 percent of relationship assets (option A).

To summarise: to avoid any of the pitfalls above get appropriate advice and make a Will. The asset owning environment is complicated, made worse so by the now fairly standard existence of blended families and estranged family members. That simple act will save your surviving spouse or partner and your family from a huge amount of stress, cost and anxiety. And it is a constructive way of ensuring their continued protection.

If you do not currently have a Will in place, then now is the time to get in touch with one of our experienced Wills and Estate lawyers who can assist you with drafting a Will.

Contact us on 03 441 2743 for a discussion about your Will or find out more about the Wills and Estates team here.