Lawyers are often asked: ‘What happens if I die without a will?’. The answer is not always straightforward, as Vesna Pocuca, Wills and Estates Lawyer explains.
When a person dies without a will that means that the person did not make formal arrangements for what will happen with his or her property (estate) after their death. This person died ‘intestate’. The estate will be distributed in accordance with the intestacy rules of the State in which majority of the assets of the deceased are located. Each State in Australia has its’ legislation which sets out the intestacy rules. In Victoria the Administration and Probate Act (1958) sets out who will be beneficiaries and proportion of the estate that they will inherit. The question of who and how much will they inherit depends on the personal circumstances of the deceased at the time of the death. This may include;
– Was the deceased married/ in a defacto relationship at the date of the death?
– Was the deceased formally divorced?
– Did the deceased have children (For example, if the deceased was not divorced then both the spouse who was still married to the deceased and the current partner will be entitled to share the estate, and if the deceased had children they also might be entitled to a share)?
– Were those children with the person who was a spouse/partner at the date of the death or with the ex-spouse/partner (if the children are from a different relationship, then they might share the estate with the current spouse/ partner, depending on the size of the estate)?
– If the deceased did not have a spouse/ partner or children, which relatives of the deceased are alive: parents, siblings, nieces and nephews, grandparents, aunts and uncles? If none of those relatives are alive then the estate will go to the government.
– The size of the estate could also be relevant. In some circumstances, if the monetary value of the estate is over the amount prescribed by the legislation, a formula for calculation of entitlements of particular beneficiaries, set out in the legislation will need to be used.
The Victorian intestacy rules were significantly changed in November 2017. The Victorian intestacy rules changed several times in the last decade, so we cannot know what rules will be in force at the time of death of each individual.
Someone, usually a person who is entitled to the largest share of the estate in accordance with the intestacy rules, will need to apply to the Supreme Court for a grant of Administration. The administrator will then be able to deal with the assets and distribute to the beneficiaries in accordance with the intestacy rules.
In general intestacy should be avoided because:
- You do not control who and in which proportion will inherit your estate;
- You do not know who will be eligible to administer your estate;
- There might be tax consequences for the estate, which maybe could be avoided by making a will and estate planning;
- The costs of administering of the estate might be more expensive;
- There might be a dispute about who actually is the next of kin (for example it might be a dispute about whether a person who was in a relationship with the deceased at the time of the death was the deceased’s partner).
To discuss your wishes further and to make a will please contact Vesna Pocuca or Trent McGregor on 5472 1588 or 5434 6666.