What is intestacy?
If you die without a Will, it means you have died intestate.
However, intestacy does not only occur when a person fails to make a Will. Other causes of intestacy include:
- the Will failing to properly deal with all of the person’s assets;
- the Will is determined to be invalid because it was not signed and witnessed according to law; or
- the person did not have mental capacity to make a Will.
What are the intestacy rules?
The law provides a formula to determine which family members receive what share of your estate. Each state and territory of Australia has different rules about who a person’s next of kin are and what portion of your estate they will inherit.
Those that can receive a share of your estate include your spouse and children. If you do not have a spouse or children, then provision is made for other people such as your parents, brothers and sisters, nieces and nephews then grandparents, aunts, uncles and cousins.
Therefore, the best way to ensure your estate is distributed in the way that you want, is to make a valid Will and keep it up to date.
Who administers an intestate estate?
The person who deals with your estate when you die intestate is called an Administrator. This person must be appointed by the Court. The administrator will then have to pay debts of the estate, gather the estate assets, finalise any tax affairs and distribute the estate in accordance with the intestacy rules.
How is an intestate estate administered?
If you die intestate your estate will be administered as follows:
- If you have a spouse and no children, then your spouse is entitled to the whole of your estate;
- If you have a spouse and children, then:
- If the value of your estate is less than $150,000 excluding household chattels, then the whole estate is given to your spouse;
- If the value of your estate exceeds $150,000 excluding household chattels, then your spouse is given the household chattels, $150,000 and;
- If you have one child, ½ of the balance of your estate; or
- If you have two children or more, ⅓ of the balance of the estate.
- Your children will then receive the remainder of the estate in equal shares.
- If you have no spouse but have surviving children, they will receive the balance of your estate in equal shares.
- If you are survived only by your parents, they will receive the whole of your estate.
- The law then provides further options for when you are survived by only grandparents, siblings, aunts and uncles for example however your estate will not be divided amongst anyone more remote than nieces, nephews or first cousins.
- If you are not survived by any next of kin, your estate is deemed to be bona vacantia and the Government is entitled to the whole of your estate.
What is a spouse?
A spouse includes your husband or wife, de facto partner or civil partner, including a same sex partner, at the time of death.
The law considers a number of factors in determining whether someone is a de facto spouse. This includes, for example, the nature and extent of your common residence, the length of your relationship, whether a sexual relationship exists and the degree of financial dependence/interdependence.
De facto partners can be same sex however you must have been in a continuous relationship for at least two years ending on the death of one the partners. Given this, it is not necessary for you to be physically living together for the entire period to be considered a de facto partner.
How do I avoid dying intestate?
The only way to avoid dying intestate is to ensure that you have a valid, correctly executed and up to date Will that correctly deals with all your property. For further questions about making a Will, contact our team at CRH Law.