What happens if you die without a valid Will?
The consequences of dying without a valid Will are farther reaching than just abandoning your estate or giving the courts a bit of a headache. Known as dying intestate, this outcome kickstarts an expensive and stressful process for your family; it leaves children with no guardian, loved ones with no support, and your estate vulnerable to family disputes.
It's much easier to have a Will than risk dying with an intestate estate.
This leaves surviving relatives with a headache in distributing assets, bank accounts and real property with a lack of financial protections, and your next of kin with overwhelming estate administration.
None of us really have any plans of dying soon, so we think it can wait. But the reality is that life is filled with uncertainty, and it's important to understand that not having a Will risks leaving a pretty horrible situation for your family, surviving partner and beneficiaries left behind if you die, or lose capacity, suddenly.
Below, we cover the consequences for a person's assets and estate administration, of dying without having a Will in place- known as dying intestate.
What is Intestacy?
Intestacy refers to the situation where a person dies without a Will. Whilst most Australians have never heard the word, 50% are currently at risk of the label and its associated consequences for the transfer of assets after death.
What's the impact of dying intestate on the probate process?
Firstly, passing away interstate generally draws out probate proceedings. This refers to the court process of appointing and granting an executor authority to access, manage and transfer assets within the deceased's estate.
With no Will, the court has to determine and approve who this person will be, as well as who your estate will be distributed amongst. In the case of an intestate estate, this involves a letter of administration by the next of kin to gain authority to distribute assets.
An intestate estate leaves family unable to access, manage, or protect your life's work before a letter of administration is granted. This leaves money, property and business affairs vulnerable, and family disputes likely. Drawn out probate from the absence of a valid Will can also generate significant cost in legal fees and time, as the process takes longer.
Probate with a valid Will
Whilst a Will does not avoid probate completely, there are huge benefits on the process of how the estate is distributed. Firstly, the probate process of appointing an approved executor to administer your estate and final wishes can begin with no roadblocks when there is a valid Will. The executor will have been named in the legal document, and the deceased leaves clear estate wishes to be followed.
A valid Will leaves no ambiguity over who and which assets you wanted distributed where. Making it the quickest, smoothest and least stressful way to see your wishes carried out, having a Will has benefits for your beneficiaries, assets in your estate, as well as providing you peace of mind in life.
What happens when you die intestate?
One of the main consequences of dying without a Will is that the state government intestacy laws in your specific state or territory will determine how your estate is distributed, rather than you making this choice. Different rules create different lists of priority for people who are eligible to inherit the assets in the deceased estate - ultimately meaning that the government will be determining the beneficiaries receiving the assets which make up your life's work, rather than you.
To find out more about the intestacy laws of your jurisdiction, select your state:
Generally however, the assets will be distributed in the following order of priority:
- Spouse or domestic partner: If the deceased had a spouse or domestic partner at the time of their death, that person will usually receive the entire estate if there are no children, or the majority of the estate if there are children.
- Children: If the deceased had children, but no spouse or domestic partner, the children will usually share the estate equally. If a child has already passed away, their share may be distributed to their own children (i.e., the deceased's grandchildren).
- Parents: If the deceased had no spouse, domestic partner or children, the estate will usually go to the deceased's parents. If the deceased only had one surviving parent, the estate may be shared with siblings.
- Siblings: If the deceased had no spouse, domestic partner, children or parents, the estate may be distributed equally among the deceased's siblings, or their children (i.e., the deceased's nieces and nephews) if a sibling has already passed away.
The risks of dying intestate
The potential your money will go to the government
If there are no surviving family members, the assets in a deceased estate may go to the state or territory government. This means that your wishes are not carried through, and any important people or causes who you would intended to be beneficiaries are neglected.
No provisions for friends, community or charity
These laws also rarely make any provisions for distributing assets to important friends, community or a charity which the deceased might otherwise have left assets to. Whilst these people might not be blood relatives or have automatic legal rights to be identified as a beneficiary of the deceased estate, an estate plan provides for these loved ones, and ensures the deceased end of life distribution reflects their life wishes.
Missed opportunities
More than just a legal document, a Will comes with the added benefit of leaving a lasting legacy with leftover assets. Dying without a Will takes away that final chance to create this legacy, whether that's through setting up a trust fund, donating funds to a charity, or gifting specific property and special family heirlooms to specific family members.
Sparks family disputes
Intestacy laws can be problematic when the court assigns the person with a 'legal claim' to your estate as the key beneficiary, even if this does not align with who you would have chosen to inherit your assets; this can spark legal conflict, where family members argue over who has the moral and legal claims to an estate. Such family disputes can tear down relationships, cost masses, and generate huge stress.
Difficult guardianship decisions
Although in most cases the appointment of a guardian will only become relevant once both parents have died, writing a Will to appoint guardians for your children or dependents is extremely important. Without expressing your wishes in the form of a Will, this decision could be left entirely in the hands of the court.
During this process, anyone is entitled to make a guardianship application to courts about why they believe they would be the correct and proper person to act as guardian; this can be a traumatic scenario for the children and other family members, and can result in a decision that you may not have agreed with.
While the Court will decide who should be appointed as the guardian based on what they believe to benefit the best interest of the child, this can all be avoided by nominating guardians in a Will to begin with.
No influence over your end-of-life wishes
Dying without a Will risks your end of life wishes getting lost amid the overwhelm of grief. From where or how you'd like to be buried, to who you'd like at the funeral, these small but important details are left vulnerable intestate. Leaving your family to decide all of these things can be a stressful process, which leaves them with substantial doubt and guilt about getting it wrong.
Lost capacity without a Will
If you're involved in an accident or get ill and lose capacity, a power of attorney can step in to take care of financial and medical decisions, and act in your interest. Not having a Will means losing automatic transfer of authority if the need arises. This absence of a legal representative can create damaging delays, given that your family needs to attend court to apply to have this same authority on making decisions on your behalf.
Losing capacity without a Will means assets could go mismanaged, important medical decisions not be made, and your wishes not honoured.
Why you should write a Will
Writing a valid Will is the simplest, but most effective way, to secure your family's financial situation and ensure your wishes, and estate, are protected. You'll have peace of mind over where your money is going, the opportunity to outline equal shares, and identify your children's guardians.
What's more, you can even set up a trust fund to take advantage of tax benefits and outline wishes on related end of life matters. As well as outline power of attorney your financial or medical decisions if you lose capacity, and give back to the loved ones who might not be recognised as a beneficiary in the law which governs estate administration under intestacy.
How Safewill can help
Safewill offers an affordable, flexible and easy way to make your Will online, and prevent family members having to navigate intestacy law if you die intestate. You'll even be supported by legal professionals, and a team of Will experts overseeing the process at each stage.
Get started today
Call one of our experts for a one-to-one on 1800 103 310 , or via live chat now.