When someone dies without a Will (known as dying intestate), their estate is distributed according to strict legal rules rather than personal wishes, which can lead to complexity, delay and unexpected outcomes.

To quote Benjamin Franklin: “…in this world, nothing is certain except death and taxes.”

Whilst it is a given, death is not something one likes to think about freely, so it is not uncommon for people to pass without having their affairs sorted. There are many assumptions about what is to happen to your assets (your ‘estate’) in the event of your death, whether that be that it will automatically pass to your family, or that the Government will get it. In reality, it is not that clear cut and there are laws that dictate what is to happen to your estate in the event of your passing without a Will in place (known as dying “intestate”).

 

Who can administer your estate if you die intestate?

 

The priority of persons who can administer your estate in the event of you dying intestate is as follows:

• your surviving spouse;

• your deceased’s children;

• your grandchildren or great-grandchildren;

• your parent or parents;

• your brothers and sisters;

• the children of any of your deceased brothers and sisters;

• your grandparent or grandparents;

• your uncles and aunts;

• your first cousins;

• anyone else the court may appoint.

 

Whilst this may not appear to be an issue, you should note:

• the appointment of an administrator can only be done by way of a Court application, which is a costly and timely exercise;

• there may be an issue of whether someone is actually your spouse or not in accordance with the law (or such a fact might be contested by interested parties);

• who you want to be your administrator may not end up being your administrator, as a person needs to establish their priority by providing evidence that a person higher in the order of priority is not entitled to priority because of death, incapacity or renunciation (noting there is no legal obligation for a party to renounce their interest in this regard).

 

Who receives the benefit of your estate if you die intestate?

 

If you are survived by a spouse and do not have any children, your whole estate will pass to your spouse.

 

If you do not have a spouse and are survived by children, your whole estate will pass to your children and if more than one in equal shares (noting that if you have a child who has predeceased you, their children will receive that child’s entitlement under this provision). If your children are minors, their entitlement is to be held on trust by their guardian until they attain 18 years of age.

 

However, if you are survived by a spouse and children, your estate must be distributed as follows:

- Your spouse is to receive:

• $150,000;

• Your household chattels;

• If there is only 1 child, one half of the residuary estate, otherwise if there is more than one child, one third of the residuary estate.

 

- Your children are then to receive the balance of your residuary estate and if more than one in equal shares (noting that if you have a child who has predeceased you, their children will receive that child’s entitlement under this provision). Again, if your children are minors, their entitlement is to be held on trust by their guardian until they attain 18 years of age.

 

If you are not survived by a spouse or children, your estate is to be distributed in the following order:

• Your parents or the survivor of them;

• Your brothers and sisters, and the children of your brothers and sisters who do not survive you;

• Your grandparents or the survivor/s of them;

• Your uncles and aunts, and the children of your uncles and aunts who do not survive you.

 

As you can see, the process can get quite complicated, especially if there are persons in the above categories who you do not wish to receive the benefit of your estate.

 

If you want certainty as to who has control of and who receives the benefit of your estate (subject to rights of certain persons at law), you should ensure you have a Will in place which validly appoints a person or persons as your executor, and which details how your estate is to be distributed.

 

We recommend your Will be prepared in conjunction with consideration of your estate plan as a whole. Please contact our office if you would like to make an appointment with our estate planning team who will be happy to offer you assistance in this regard.

 

Author: Candice Etherton