What Happens if You Die Without a Will?07-08-2023 | Resource | Marco Manna
Ensuring that our affairs are in order is essential to avoid unnecessary complications for our loved ones after we pass away. One critical aspect of this preparation is creating a valid Will. A Will allows you to specify how your assets and belongings should be distributed after your passing… but what happens if you don’t take the time to draft a Will?
At Lamrocks, our Wills and Estates team is often asked the question, “What happens to your assets if you don’t have a Will and does the Government take them?”
Passing away without a Will leads to a situation known as dying intestate. In New South Wales (NSW), dying without a will can have significant consequences on the distribution of your estate.
Intestate Succession Laws
When a person dies without leaving a Will, the distribution of their estate is determined by the intestate succession laws of the state. These laws vary from one state to another, so it's crucial to understand how the process works.
In New South Wales for example, the succession laws would mean that assets would be distributed as follows:
1. Current Spouse and Children from the Relationship.
If the deceased leaves behind a spouse (including de facto or same-sex partners) and only children from that relationship, the spouse will receive the entire estate. It should be noted that a person can have more than one spouse (such as a de facto partner and someone else who they are still legally married to). In an instance such as this, the spouses will share the estate equally.
2. Current Spouse and Children from a Previous Relationship.
If the deceased person also has children from a previous relationship, the current spouse is entitled to all of the personal effects of the deceased, a statutory legacy (determined by legislation) and half of whatever is left of the estate.
The remaining half of the estate is shared equally between all surviving children.
3. Spouse and No Children.
If the deceased has a spouse but no children, the entire estate goes to the spouse.
4. Children and No Spouse.
If there are children but no spouse, the estate is divided equally among the children. If any child has died and left behind a grandchild, the grandchild will inherit.
5. No Spouse or Children.
If the deceased has neither a spouse nor children, the estate is distributed to other family members following a specific order, starting with the parents, then siblings, grandparents, aunts and uncles, then cousins.
6. Unclaimed Estate.
In some unfortunate cases, when no relatives can be identified, or there are no known heirs, the estate may be claimed by the state government.
Issues That Can Arise
When someone dies without a will, there is no named Executor to oversee the estate's administration. In such cases, the Supreme Court may appoint an administrator who will fulfill a similar role to an Executor and take responsibility for managing the deceased's assets, paying off debts, and distributing the estate according to intestacy laws.
It is important to remember that a Court-appointed administrator will not be familiar with the wishes of the deceased and can only follow the processes outlined in legislation which may not reflect the wishes of the deceased. Some of the most common issues that arise in these situations include:
- Challenges and Delays
Dying intestate can lead to various challenges and delays in distributing the estate. Without a Will, the process of collecting and distributing a person’s estate can be more complex, time-consuming, and expensive. Moreover, the intestacy laws may not align with the deceased's wishes, leading to potential disputes among family members over the distribution of assets. This can lead to situations where claims are made against the estate and the process becomes even more difficult.
- Higher Legal and Administration Costs
Dying without a Will may result in higher legal and administration costs as it becomes necessary to navigate the complexities of intestate succession. These costs can eat into the estate's value, reducing the inheritances of beneficiaries.
- Not fulfilling Charitable Bequests
If someone has specific charitable intentions, such as leaving a portion of their estate to a charitable organisation or cause close to their hearts, those wishes won't be fulfilled without a valid Will.
Dying without a Will in NSW can lead to unintended consequences and complexities when distributing the estate. While it may be uncomfortable to think about mortality, creating a Will is essential for protecting your loved ones and ensuring that your assets are distributed according to your wishes.
To avoid unnecessary legal hurdles and ensure a smooth transfer of your estate, it is recommended that you speak to a legal professional and draft a valid Will that accurately reflects your desires and reduces the chance of a potential dispute or challenge in the future. Taking this single step alone can provide peace of mind, knowing that your loved ones will be taken care of after you are gone. For assistance making a Will, speak to the team at Lamrocks on ph: 02 4731 5688.