Intestacy in Australia

What Is Intestacy?

Coming to terms with the death of a loved one can be one of the most difficult things someone experiences in their life. Add in the pressure of dividing up that person’s estate and you’re looking at a much bigger and longer-lasting headache. But swathes of people across Australia die every day without leaving any formal instructions about where their assets will end up. This is known as dying intestate, or intestacy.

Failing to create a Will means you have no say in how your assets are divided when you die. Instead your estate will be carved up by the courts according to the laws of intestacy in your state or territory. While it’s not as cut-throat as you might imagine it could result in some less than ideal outcomes when it comes to the guardianship of children, pets or the allocation of prized possessions.

Who is an intestate person?

An intestate person refers to:

• An individual who neglected to create a Will
• Someone whose Will has been lost or whose Will is deemed illegitimate
• Someone who failed to allocate the full scope of their estate

For some, failing to construct such an important legally binding document comes purely down to inaction. This may be due to fear of death, the belief they do not have anything of value to bequeath to others or simply indecision about who should receive their estate.

For others, it could be failing to follow correct procedures in creating the Will either by forgetting to sign it or neglecting to include a witness in the process.

A Will may also be considered unlawful if the person signing was not mentally sound when it was constructed.

How will my estate be distributed?

When you die without a Will in Australia your next of kin is the first in line for their inheritance. This could be a spouse, children or a brother or sister. Typically the courts consider the spouse to be the primary recipient if they have survived the deceased followed by any children. If they were unmarried or were not in a de facto relationship and lived childfree their assets will instead be allocated to other surviving relatives.

The pecking order:

• The deceased person’s spouse (husband, wife or de-facto partner with whom the deceased has been in a relationship with for at least two years)
• Any children
• Their parents
• Grandparents other relatives including siblings, aunts and uncles or cousins
• If there is no surviving next of kin the estate will pass on to the state government

Handling an intestate estate

It is not as easy as the next of kin simply walking up to their local courthouse and requesting access to the estate. They must first lodge an application to the court to become an administrator of the estate by applying for a grant of letters of administration. Once approved, they will become responsible for overseeing the execution of the estate.

Disputes can easily arise at this point as family members struggle to decide who has the greatest entitlement to the deceased estate.

The full process for accessing and executing an intestate estate however will come down to the specific laws set out by each state and territory in Australia.

Intestacy By State

New South Wales

In New South Wales the next of kin must apply for a ‘Letters of Administration’ to the NSW Supreme Court in order to begin dividing up the estate. The first state typically considers the spouse or the deceased person’s children the rightful executor of the estate over other surviving family members. The estate will be divided equally between the spouse and surviving children, but will be allocated further down the family line if this does not apply. The administrator is responsible for confirming which other family members should receive a share of the assets. To find out more click here.

The Australian Capital Territory

The laws are similar to New South Wales, with the spouse or surviving children deemed as the rightful next of kin for a deceased estate. The spouse and children will each receive an equal share of the entire estate if the value is less than $200,000. To access the inheritance the next of kin will need to appoint an administrator to oversee the allocation of the estate but they can request the ACT’s Public Trust and Guardian to oversee the process. Read more here.

Victoria

If someone dies intestate in Victoria their next of kin is required to apply to oversee the estate. The next of kin is deemed to be the spouse or domestic partner of the deceased or any surviving children. The full estate is typically allocated to the spouse unless the deceased had children from a previous relationship. The spouse will be responsible for deciding which other family members receive a share of the deceased estate.

Queensland

In Queensland the spouse is the first in line for an intestate estate, receiving the first $150,000 of the estate and assets before dividing the remaining balance to any surviving children of the deceased. If there is more than one child the spouse inherits one third of the estate and the children share the remaining assets among themselves equally. If the deceased was not survived by a spouse the estate is shared equally among their children.

South Australia

The entire estate is allocated to the spouse of the deceased if the total value of assets is less than $100,000. If the value is more than $100,000 the spouse will receive $100,000 plus all personal property with the remainder of the estate to be divided up equally among the children of the deceased.

How do I protect my estate from passing on intestacy?

The quickest and easiest way to protect your assets is by creating a legally binding Will before you pass away. This will allow you to choose who gets a share of your estate and should help to alleviate some of the potential family disputes arising from who is entitled to the estate. To ensure the Will is legally binding it must be signed by a witness and include all assets and debts in your possession.

Ready to take the leap? We have made the process really easy here at Safewill. Our team of legal experts are making it super simple to sort out your end of life arrangements from the comfort of your own home. Click here to get started.