Legal Tip 35: Dying without a will

Dying without a will


If a person dies without a will this is known as 'intestacy' and the laws of intestacy will apply. If a person has a will that has been revoked or is invalid for whatever reason and dies then the laws of intestacy will also apply in this case as well.


Intestacy laws are state based and will vary slightly from state to state.


In NSW the laws can be found under the Succession Act 2006 in sections 101-140.

See http://www.austlii.edu.au/au/legis/nsw/consol_act/sa2006138/


Generally in NSW a surviving spouse takes the assets of the deceased. However if there are children from another relationship the assets would be shared. If there are multiple spouses the spouses may have to share. If there are no spouses and no children then the parents may take the whole estate in equal shares if both parents alive. If no parents, no children and no spouse then the brothers and sisters take the whole estate. etc.



If there is no will then there will be no executor appointed. This means that someone will be able to apply to Administer your estate. This could be one or more family members, and disputes about who will take this role can occur. The person appointed will be called the Administrator not the Executor.

 

So the order is
- partner/partner+kids from another
- parents
- siblings

Why do I need a will if I'm happy with the above order?

 

What can cause a will to be invalid?

 

I would also be concerned that the Public Trustee could be appointed by a well intentioned beneficiary where there is no will.

A will must be used to ensure that beneficiaries don't "share" equally in case of intestacy. eg a child with special needs, a child who has already received financial support perhaps etc. Or just the black sheep who gets nothing or to benefit a child who has been a carer and provider etc

 

will executed under duress, coercion, the testator lacked testamentary capacity, not properly executed...

 

Many reasons why you would still want a will.

You would want to choose your executor for starters. Without someone nominated the family we have to fight for appointment as Adminstator - there may be only one contender, but there could be multiple competing contenders.

Straight passing of property involves no asset protection or tax strategies. e.g. Super may be paid to the estate and then out to non dependants who may be taxed at 30%.

A testamentary trust could be incorporated to restrict access by the children until a certain age. A minor child could be entitled to their share when they demand if there is no will - s138 (in NSW).

A testamentary trust could also give good asset protection on divorce, excellent asset protection on bankruptcy and stream income to minors at adult tax rates.

The will may also contain instructions regarding disposal of the body.

And one other biggie - out right gifts under intestacy can mean the gift passes to someone else not anticipated if that beneficiary dies. e.g. You could die, leave everything to your adult son who then dies and his spouse remarries = your assets benefiting a stranger's new husband!!

 

All the above and
Not properly witnessed - a recent case involved a will that was witnessed but wasn't actually signed.

A will may be partially valid too - the person could die partially intestate if the will hasn't taken into account all assets.

 

A lawyer I know suggested the issues a same sex couple may face without a will should be understood by married couples.

 

Interesting, but the same laws apply to same sex and opposite sex de factos and married partners (in NSW at least) because of the definition of spouse:

104 Spouse
A spouse of an intestate is a person:

(a) who was married to the intestate immediately before the intestate’s death, or (b) who was a party to a domestic partnership with the intestate immediately before the intestate’s death.

see s 104 Succession Act NSW http://www.austlii.edu.au/au/legis/nsw/consol_act/sa2006138/s104.html

Domestic partnership is defined in the next section s105:
A domestic partnership is a relationship between the intestate and another person that is a registered relationship, or interstate registered relationship, within the meaning of the Relationships Register Act 2010 , or a de facto relationship that:

(a) has been in existence for a continuous period of 2 years, or (b) has resulted in the birth of a child.


The only real difference is if you marry for 1 day you are a spouse but it could take up to 2 years to become a spouse as a de facto (whether sex or opposite sex).

 

Would sisters be before nieces/nephews?

What about if the person was in a relationship with a married person? Would it go to their “partner” first?

 

Correct - But many are suprised by what their rights are. And many families arent understanding either. eg parents who may wish to assert rights for burial and disregard the spouse

 

"First"?
A friend may have zero rights to claim v a spouse and family. No domestic partnership.

 

Yes under the intestacy laws

If a person has a defacto without divorcing their previous partner they would have 2 spouses for succession law. Under the NSW intestacy laws the 2 spouses would generally have to share.

 

@Terry_w have a similar scenarios where a relative left an intestacy estate and their partner is yet to apply for Administration.

Its been over 2.5 years and still no letters of admin, while details are getting squared between the beneficiaries (not me, the kids from a previous marriage) over who gets what.

Are there grounds to force a move further down the Administrative lineage? CGT is now in play, along with a bunch of loan interest...

 

Your relative could apply for administration