As lawyers, our advice is that everyone should have a will to determine how their property will be divided after they have passed away. Even people who do not have significant assets should have a will because it represents their wishes and allows them to acknowledge the people and causes which were dear to them.
However when a person dies without leaving a will, known as having died ‘intestate’, the law cannot allow that person’s property and belongings to be owned by nobody. Owning property comes with rights but also with responsibilities, for example houses and cars require maintenance or they may become safety hazards. The Succession Act 2006 contains provisions to determine who should be the new owner of a deceased person’s property if they do not leave a will.
The intestacy provisions operate by looking at the deceased person’s family circumstances and essentially passing their property to their nearest living relative/s as fairly as possible. The process is as follows:
The spouse is entitled to the entire estate. However it is possible to die leaving two legal spouses where a person is married, but separated and then commences a de facto relationship. In that case, both spouses divide the estate between them equally, unless:
they reach a different agreement between themselves; or
they apply to the Court to determine the division of the estate.
The children are entitled to the entire estate divided equally between them.
Where the children are also the children of the spouse then the spouse receives the entire estate; but where the children are not the children of the spouse then the spouse is entitled to:
the deceased’s personal effects;
a CPI adjusted statutory legacy of $350,000.00; and
half of the remainder of the estate.
The children are entitled to the other half of the remainder of the estate once the spouse’s entitlements have been accounted for.
Then the entire estate is divided in order between all members of the following categories:
Parents, but if there are none surviving; then
Siblings, but if there are none surviving; then
Grandparents, but if there are none surviving; then
Related aunts and uncles (i.e. only those who are the siblings of the deceased’s parents).
If there are no living relatives entitled to the estate then the State receives the entire estate.
In all of the above categories (except receipt by the State), where a member of that category has passed away before the deceased but had surviving children, then those surviving children are entitled to equal shares in what their parent would have received.
So, for example, if the deceased died with no spouse but had 2 children and if 1 of those children passed away before the deceased leaving 2 children of their own who are the deceased’s grandchildren, then the estate would be divided between the surviving child who would receive half and the grandchildren who would receive one quarter each.
This also applies in circumstances where all members of a category are deceased but there are surviving children. For example, if the estate would be divided between the deceased person’s siblings, all of whom have passed away but who left children of their own who are the deceased’s nieces and nephews, they would receive the estate before it became necessary to determine if the deceased’s grandparents were still alive.
As there is no will there is nothing to be challenged in terms of whether the deceased lacked testamentary capacity or was unduly influenced in making the will.
However, it is still possible to make a claim for further provision from an intestate estate. In the same way that an eligible person who was left out of a will may make a claim that their needs entitle them to provision from the deceased’s estate, an eligible person who would receive nothing or would receive an amount insufficient for their needs from the estate under the rules of intestacy can make a claim.
For example, if a deceased person died without a will, leaving an estate of $850,000.00 and was survived by his second wife and two sons from his previous marriage, his estate would be divided roughly as:
Personal effects to his wife;
$350,000.00 to his wife; and
$500,000.00 divided between his wife and two sons with;
The wife receiving $250,000.00; and
The sons receiving $125,000.00 each.
It would be open for one of the sons to make a claim for further provision on the basis that $125,000.00 was insufficient for his needs although this claim would be measured against the impact that a reduction in the competing claims of the wife and other son would have on their respective needs.
It is similarly possible for anyone who is an eligible person to make a claim for further provision against an intestate estate regardless of whether they would be a beneficiary of the estate under the rules of intestacy. For example, where a person dies without a will leaving a wife and children who are also the children of his wife the wife will receive the entire estate, but any of the children, or indeed grandchildren under certain circumstances, of the deceased can still make a claim for further provision.
For more information about making a claim for further provision from a deceased estate, refer to Claiming further provision from an estate or call us on (02) 9440 1202.