Intestacy Laws and Rules in Victoria
What is Intestacy?
When you die without a will, you die without any formal arrangement for the disposal of all your property and assets (your ‘Estate'). The situation in which you have died without making a will is called ‘intestacy', and the law has established its own arrangements for disposing of your Estate.
Bereavement is always an incredibly difficult time and not having a will can cause unnecessary strain on your family. The pain will be exacerbated in the event of a particularly tragic death, so no matter how young or old you are, it is always better to leave a will than rely on intestacy laws.
However, the law does provide an orderly process for the disposal of your property and assets in the event of you dying without a will. In Victoria, the relevant statute is the Administration and Probate Act 1958.
What happens when there's no will?
The Administration and Probate Act 1958 provides a procedure to be followed when there is no will and a list of people who are entitled to receive a share of your Estate. This provides some security and structure to what would otherwise be an extremely awkward, chaotic and potentially bitter process.
Administering an Estate
Before that, however, the Supreme Court will make a Grant of Administration and appoint an Administrator to dispose of the deceased Estate. The Administrator will then administer the Estate. This includes making a list of every single thing the deceased owned from real Estate and bank accounts right through to furniture and books. The Administrator must then do everything in his or her power to preserve the condition of these things – including maintaining all investments to the best advantage of the beneficiaries – until the moment when everything will be distributed according to the list of beneficiaries provided by the law.
Clearly, this is a major responsibility and not appropriate for just anyone to undertake. Again, it is far preferable to consider the matter and make a Will which appoints an Executor who is someone of your choice and who enjoys your trust.
Furthermore, an Administrator appointed by the Court is more vulnerable than someone you have chosen. The appointment can be easily disputed by bereaved relatives who may think that the appointee is not capable or does not have their interests at heart. Precisely because of the possibility that the Court may inadvertently appoint someone who, indeed, is incompetent or has no consideration of what is in everyone's best interests, an expensive insurance bond may have to be paid against the possibility that the Administrator may maladminister or defraud the Estate.
Distributing the Property and Assets
The Administrator must then distribute the property and assets according the list prescribed by the Administration and Probate Act 1958.
This Act lists all those to whom your Estate will be distributed (the ‘beneficiaries') and in what order, including spouses, children, parents, grandparents, brothers and sisters and so on.
A basic summary of the list is as follows:
- If you leave a spouse or domestic partner, but no children, then your spouse or domestic partner will receive your whole Estate;
- If you leave a spouse or domestic partner and children, your spouse will receive the first one hundred thousand dollars and one third of the residue, while your children will receive the remaining two thirds equally;
- If there is no spouse or domestic partner and no children, then your parents will receive your whole Estate. If your parents have predeceased you, then your Estate will pass to your siblings. If you have no siblings, the Administrator will continue to trace your family tree and collateral relatives;
- In the event that no surviving lineal or collateral relatives can be found, the Government will receive your entire Estate.
It is also important to note that your Estate will pay for all of the abovementioned searches.
There are various permutations of this list – for example if the deceased is survived by both a spouse and a domestic partner – but the general intention of the law is clear.
This list might generally reflect the wishes of some people. However, a customised Will that clearly expresses your wishes and, therefore, reflects your own life and relationships will always be best, whereas the Act's version of who-gets-what may be unsatisfactory – and unfair. Your life is unique, whereas the distribution list prescribed by the Administration and Probate Act 1958 is general. The law's distribution list cannot ensure the personal touches you would prefer, which may end up being ignored. Only you truly know your family situation, the friends you most value, and who will best appreciate your possessions and assets when you are gone.
Why You Should Make a Will
Clearly, the Act automatically favours family over everyone else. Even among your family members, the needs of some may be greater than others and your desire to help the most needy first – regardless of whether they are your spouse, child, sibling, or whoever – may be completely disregarded. For example, if there is no Will you will not be able to provide for any special needs one child may have because all children inherit equally. Additionally, you may feel there are family members who should not receive a share of your Estate and this will be ignored if you don't have a Will. There may be people who are not relatives but who you feel are entitled to a share of your Estate before some family members; if you don't make a Will, this won't happen.
Harmony among those you leave behind is better than questions and bitterness. If you leave it to the law to administer your Estate, the way it divides your assets among your family may defy your own wishes and create bad feeling among those you love. It is just as important as your own wishes that your friends and family know of them. Also, if you are in a de facto or same sex relationship, it is in your partner's interests that you write a valid Will. While the law recognises the rights of 'domestic partners' in relation to intestacy – and this is regardless of gender – it has stringent tests to establish that such a relationship did, indeed, exist. Going through this could prove to be an unnecessarily humiliating and frustrating experience.
Clearly, it is preferable to take the time to write a Will or to update it if you already have one. When you do so, it is important that your Will follows strict legal requirements. Otherwise it will not be a valid Will, and intestacy will still occur.
Rose Lawyers are trained in probate law can ensure these vital requirements are met and that your Will is safely stored.