Dying Without a Will
The problems you leave for your family to deal with
When a person passes away without a Will, the Administration Act 1969 (“the Act”) sets out how the Estate of the deceased will be distributed.
Firstly, the family need to determine the value of the assets in the Estate. Where the value is less than $15,000 the process is more straightforward. For Estates worth more than $15,000, an application has to be made to the High Court for a grant of Letters of Administration.
Unlike a Will, where you can specify who should administer your Estate and who the beneficiaries should be, where there is no Will the Act sets out the process for applying for Letters of Administration including who may apply, who the eventual beneficiaries will be, and what share of the Estate they will receive.
Where the deceased leaves behind a surviving spouse, civil union partner or de facto partner, this person is entitled to a grant of Letters of Administration. If there is no surviving partner or spouse, the deceased’s children may apply, or, failing children, a grandchild may apply. The Act contains further provisions for circumstances where someone else has to apply.
Once an Administrator is appointed by the High Court, that person then has authority to deal with Estate assets, and those assets are then called in.
For example, real estate or shares can be sold, and funds in bank accounts in the name of the deceased can be withdrawn so that all liquidated Estate assets are held in the same account in anticipation of distribution. The Administrator is then tasked to ensure that the Estate is distributed in accordance with the Act. The Act provides an exhaustive list that determines who the beneficiaries of the Estate are, and what they are to receive. For example, if the deceased leaves behind a surviving spouse and children, the Estate is divided as follows:
- Any jointly owned property (including jointly owned family homes and bank accounts) will pass to the surviving joint owner regardless of the provisions of the Act,
- All personal chattels will pass to the surviving partner,
- The “residue of the Estate” (everything left over after payment of all Estate debts) is divided into shares. Firstly, the “prescribed amount”(currently $155,000) is paid to the surviving partner absolutely,
- Anything then left over is split into thirds. One third of that remainder is for the surviving partner, and
- Two thirds of the remainder is for the children.
Depending on who does or does not survive the deceased, the beneficiaries of the estate could also include siblings, parents, grandparents, aunts or uncles. Where none of these classes of beneficiaries exist, the Estate vests in (belongs to) the Crown. The Crown has a discretion under the Act to provide for dependants of the deceased, and persons for whom the deceased might reasonably have been expected to make provision.
These guidelines show the importance of executing a Will to avoid the likelihood that the division of your Estate may not reflect your wishes. There is no time like the present to provide us with instructions, have us prepare your Will, and have us put your Will in our Deeds Security Area for future reference.