Dying without a Will
As the holiday season comes to an end, you may have had discussions with your family about planning for the year ahead. An important part of that plan might be to ensure you have a Will in place.
Quite often, we are asked “what happens if I die without a Will?” In this edition, we explain the rules of intestacy which apply if a person dies without a Will or where the Will does not effectively dispose all or part of that person’s property. The rules are set out in Chapter 4 of the Succession Act 2006 (NSW) (Act).
As we are now seeing an increase in blended families, second marriages and domestic relationships, there is a need more than ever to have a Will in place. A Will enables you to provide for more than just family members (for example friends and charities) as you see fit. Substantial administrative work and anxiety placed on family members if you die without a Will, is also avoided.
Before the assets of an estate are distributed, it is a requirement under section 103 of the Act that all funeral expenses, administration costs, debts and other liabilities are first paid out of the estate.
In order to benefit under an intestate estate, it is also a requirement under the Act that the relative must survive the deceased by 30 days.
By way of example, if the deceased dies intestate leaving a spouse (either a married person or a domestic partner) and issue (being children or lineal descendants such as grandchildren) of another relationship, then according to the Act the estate would be divided as follows:
The spouse would receive in accordance with section 113 of the Act:
- The intestate’s personal effects;
- A statutory legacy of $350,000.00 adjusted by the Consumer Price Index (CPI) since December 2005 (presently $459,427.20 in December 2016) as set out in section 106; and
- One half of the remainder (if any) of the intestate’s estate.
Therefore the remaining part of the estate (if any) would be distributed amongst the children from any other relationship. Children of the intestate and surviving spouse do not receive a share because the law anticipates that their surviving parent will provide for them.
There are many other scenarios in the Act, where parents, siblings, grandparents and even aunts, uncles and cousins may benefit from an intestate estate. The takeaway from this article is that having a Will in place ensures your assets are distributed in accordance with your wishes as opposed to a predetermined formula.
Josephine Heesh, Partner
Jessica Lobow, Associate