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 with no guidance, the related administration 'deadmin' and drawn out probate- and the headache can become a lot bigger and longer-lasting when a loved one dies without a Will.

Despite this reality, swathes of people across Australia die every day without leaving any formal instructions or anyone appointed to administer the estate.

Without a valid Will, these people who die intestate essentially leave their property, assets and distribution wishes at the discretion of the state Supreme court and the Government.

When a person dies without a valid Will

Dying without 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 Supreme Court according to the laws of intestacy in your state or territory.

While it's not as cut-throat as you might imagine, failing to create a Will could result in some less equal shares than you'd hope for. Or, could leave the guardianship of children, pets or the allocation of prized possessions in the balance.

Similarly, without an executor to administer your estate- the grant of probate can be delayed. Even those entitled to acquire property, inherit money or be left with personal chattels can be left with delays, stress and excessive lawyer fees if complications arise.

Who is an intestate person?

An intestate person refers to:

• An individual who neglected to create a valid 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, dying without a Will and 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.

Even if the deceased leaves a WIll, it may also be considered unlawful if the person signing was not mentally sound when it was constructed. Regardless of why a person died intestate, the next steps on how assets are distributed follows the same path.

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 surviving spouse, child or a brother or sister.

Typically the supreme court will 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 person 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. As appointed administrator, they will be dealing with the assets left in the estate; from property to personal effects.

Disputes can easily arise before, during or after the letters of administration has been granted however. At this point family members may struggle to decide who has the greatest entitlement to the deceased estates, and related matters on specific relationships may not be taken into account in intestacy law.

As the full process for accessing and executing an intestate estate will come down to the specific laws set out by each state and territory in Australia- those entitled to shares of the estate are not chosen by the family.

Intestacy Rules 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.

There will then be equal shares on the estate division between the spouse and surviving children. Assets will be allocated further down the family line if this does not apply. The administrator is responsible for confirming which other family members are entitled to receive a share and benefit from remaining assets in the estate.

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.

Victoria

If someone dies intestate in Victoria their next of kin is required to apply to begin administration of the estate. The next of kin is deemed to be the spouse or domestic partner of the deceased or any surviving child.

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 are entitled to receive a share of the deceased estate- again creating scope for disputes on how the assets are distributed.

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 law sets the rule that the estate will be shared equally among their children.

South Australia

In 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.

Aside from determining how assets will be distributed, you can also assign your executor to administer the estate, assign guardians and make extra provisions for charities you wish to receive a share of the assets in your estates.

To ensure the Will is legally binding it must be signed by a witness and include all assets and debts in your possession. In contrast to dying intestate, having this valid Will reduces stress for your surviving partner, child or parents- who are left with estate administration and potential disputes in the aftermath of your death.

Even if you're happy for the state law to decide, in writing your Will you reduce significant time, emotional and financial burden for those left behind. In making probate grants easier, you support your loved ones when it matters the most.

Whether that's making considerations if you've had more than one partner, or choosing to grant executor powers to a more impartial party- dying with a Will is dying with less stress for those left behind, and more peace of mind for you.

Safewill can help

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