Where there’s a Will…
Bereavement is always an incredibly difficult time for friends and family. If you don't leave a Will preparing for this moment, it could lead to a confusing situation for those left behind. No matter how old you are, having a plan in place for the disposal of your estate will make this time easier for your loved ones.
When you die, you leave an estate. This is a net asset pool which can be passed onto family or friends. A Will is a legal plan for how your estate will be distributed and managed when you die.
If you die without a valid Will, your next of kin must apply for Letters of Administration, a Court Order enabling them to act as the Administrator of your estate, and distribute it according to The Administration and Probate Act 1958.
This is called Intestacy and the eventual outcome may not reflect what your actual intentions were.
What is Intestacy?
Intestacy is the condition of your estate if you die without a valid Will. Without a valid Will, you have no formal arrangements for the disposal of your property and assets.
The Administration and Probate Act 1958 sets out the way in which an intestate's estate will be distributed. This process is very specific and may not reflect your personal wishes for the distribution of your estate.
Having an up-to-date and valid Will is the best way to ensure that things go to plan when you’re no longer around. It also ensures that your hard earned cash and assets are given to the people you want to receive them.
What happens if I die without a Will?
When you die, your Will cannot be affected until the Supreme Court makes the order for a Grant of Probate. This is an Order of the Supreme Court and establishes that your Will is legally valid and confirms the authority of the Executor.
If you die without a valid Will, your next of kin must apply to the Supreme Court for an order of Letters of Administration, appointing them the Administrator and giving them the power to deal with your assets.
First, the Administrator will make a list of all the assets in the estate. This includes everything from bank accounts and investments to the house, furniture and the silverware. The Administrator must preserve the condition of these items and assets up until the moment they can be distributed to beneficiaries.
The list of beneficiaries is determined by the law, as outlined in the Administration and Probate Act 1958. This list determines the order in which a deceased estate will be distributed:
- A spouse or domestic partner will inherit the entire estate if there are no children.
- If there are children, then the spouse or domestic partner receives the chattels, the first $100,000 and one third of the residue. The other two thirds are distributed to the child or children.
- If one of the children is deceased, and leaves a child, then that child will receive their parents share
- The deceased’s next of kin, such as parents, siblings, nieces and nephews are also accounted for within the Act.
The best way to make sure complications are avoided is to have a valid Will.
Only you know your unique family situation, the friends you most value and who will appreciate certain possessions when you are gone.
How does a Will avoid complications?
The law cannot account for the unique circumstances in your own life. The Administration and Probate Act 1958 can only attempt to prescribe a fair outcome in very general terms.
The reality is that most personal circumstances are not general. Only you know your unique family situation, the friends you most value and who will appreciate certain possessions when you are gone.
Intestacy means that you will leave your friends and love ones with no clear indication about your preferences of who-gets-what. A Will provides security and structure to what would otherwise be an awkward and potentially bitter process.
The Act is unable to take into account the people you feel are most deserving of your estate - it only considers your next of kin. A customised Will can ensure a distribution of your estate in a manner you think fair in the event of your death.
Consider the following situations where the Act would not deliver on a satisfactory result in the event of intestacy:
De facto or same sex relationships. While the law recognises the rights of ‘domestic partners’, there are stringent tests in place to ensure that the relationship did exist. This process could be unnecessarily frustrating or humiliating for your partner. It may also run the risk of your partner missing out entirely.
Special needs children. If you have a special needs child, you need to consider a Disability Trust Will. This ensures that they receive their inheritance in a way that will not affect their disability pension.
Exclusion of certain family members. You may have family members who you feel are not entitled to a share of your estate. This unique family circumstance could be ignored without a Will.
Friends. There may be people in your life who are not members of your family, but who you feel should be entitled to a share of your estate. This bequest will not happen without a Will.
How do I get a Will?
Making a good and valid Will takes care and effort. There are three main options to constructing your Will:
- Follow the Will requirements set out in the Wills Act 1997
- Complete a standardised ‘Will Kit’
- Get a lawyer to prepare a Will.
It is always recommended that a lawyer is arranged to prepare your Will. A professionally constructed Will ensures it is a valid document, so that the preferences for your estate will be carried out after your death.
A Will you have prepared yourself runs the the very high risk of legal error. This will complicate matters for your loved ones when you are gone. If you prepare your own Will and it is found to be invalid, your intended beneficiaries may not receive their share.
Intestacy is the state of a person dying without a valid Will. The Administration and Probate Act 1958 dictates who in your next of kin will receive a part or all of your estate.
The arrangements made to the beneficiaries may not reflect your intentions of how your estate is to be divided between your friends and loved ones..
Getting a professional to prepare your Will is the best way to ensure that things go to plan once you are gone.
Do you have questions about your Will? Call us on 03 9878 5222 to discuss your situation.