Dying Intestate: Why this is generally a bad idea.
Dying intestate in Australia is generally a bad idea, both from the point of having no control over the distribution of your estate and because there is no Federal legislation governing intestacy; how it is handled will vary state to state. It’s important for people of all ages to create a will so they can dictate what happens to their assets and make it simpler for their families to navigate and handle their estate. Dying intestate puts added pressure on spouses and family members when they have to make decisions for the estate, while also grieving their loved one.
Each state in Australia has its legislation which dictates intestacy which can add an additional layer of complication when managing an interstate death of a family member. In NSW, an intestate estate will be subject to three individual pieces of State legislation, the Succession Act 2006 (NSW), the Probate and Administration Act 1898 (NSW) and the Trustee Act 1925 (NSW).
What happens if you die intestate
Intestacy occurs when an individual dies without having made a valid will. Without a will, you have no control over how your assets are distributed. In NSW, the Supreme Court will nominate an administrator to distribute the intestate estate. When appointing an administrator the Court could choose the individual with the largest share in the estate, multiple people to act as joint administrators, The NSW Trustee and Guardian or any other person the Court deems suitable.
Without a will, there is a higher likelihood that disputes will arise as beneficiaries fight for their slice of your estate. This can be a time consuming and costly process, which also causes families to fall apart which causes added stress and headache during an already devastating time. Ensure this doesn’t happen by having a valid will in place which states how you want your estate to be distributed.
How is an intestate distributed in NSW?
In NSW, if you are survived by your spouse and die intestate, then your spouse is entitled to your entire estate unless you have children from a previous relationship. In the event that you do have children from a previous relationship, then your spouse is only entitled to all of your personal effects, a statutory legacy and half of the remaining estate. The remainder of the estate is then distributed equally between all of your surviving children. As of July 2021, the Statutory Legacy value was approximately $490,000. In the event that an estate is not large enough to cover the statutory legacy, then the spouse is entitled to everything in the estate and the children will receive nothing.
In NSW, if you don’t have a spouse or they do not survive you then the estate is distributed as follows:
No surviving spouse: The estate is evenly distributed between your children. If one of your children has died, then their child will inherit.
Predeceased by children/grandchildren: your parents will inherit in even share.
Predeceased by your parents: your estate will go in even share to your siblings, with their children to receive their share should that sibling perish.
Predeceased by your siblings: your estate will be inherited in equal share by your grandparents.
Predeceased by your grandparents: your aunts and uncles will receive the estate in equal share.
Predeceased by your Aunts/Uncles: the estate will be distributed equally amongst your first cousins.
If everyone predeceases you, the entirety of your estate will go to the NSW Government.
If you need a will reviewed, updated or you don’t have one yet, get started here and Voice Lawyers can assist you with estate planning through simple wills or testamentary trusts and a suite of estate planning options.
This article is general in nature and is not legal advice. If you need help planning your estate or setting up a testamentary trust, Voice Lawyers is here for you. Reach out to us for advice on estate planning matters on 02 9261 1954, email us at voice@voicelawyers.com or use our link to book a consultation.