Wills & estate planning
New South Wales
WHAT HAPPENS IF I DON'T HAVE A WILL?
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What happens to my assets?
If you die without making a valid will, you leave what is known as an "intestacy". This means you have not validly disposed of some or all of your assets.
Many people believe the Government takes their assets if they die without a will. This isn't true. It could only happen if you have no living next of kin. However, if you die without a will, your assets will be distributed according to a legal formula. This might mean that your assets do not end up with the person you would have chosen.
What about de factos and their children?
As far as your children are concerned, they do not have to be born from a legal marriage to share in the distribution of your assets. All children share equally in your assets if you die without a will.
If you leave a de facto spouse (and no children) the de facto inherits the whole of the estate. Note, the definition of de facto has changed. From 24 September 1999 a de facto spouse includes a person who:
This means that same sex couples may now have entitlements when their partner has died without a will.
If you leave a de facto and children, the same formula applies as for a spouse and children - in other words, de factos will have the same rights as a married spouse. Where the deceased is survived by a de facto and a spouse, it partly depends on the length of the relationship with the de facto, and whether there are children from the de facto relationship.
What's the formula?
The rules for distributing assets where there is no will are found in the Wills, Probate and Administration Act. These rules use a formula to distribute assets based on the family/dependants that you have left behind. This is hierarchy of claimants, and it also partly depends on the amount of the estate.
The rules can be summarised as:
There are special rules to do with the family home, which the spouse/de facto may inherit to the exclusion of any children. As well, there are particular problems where both a spouse and a de facto survive the deceased if the de facto lived with the deceased for a two year or longer continuous period. In either of these situations it is important to get legal advice.
Working out the formula
Here's an example. A husband dies leaving assets valued at $400,000. There is a surviving de facto wife and two children.
Everyone will inherit according to the formula. This gives the first $150,000 to the de facto wife, plus 1/2 of the balance of the estate, i.e. 1/2 of $250,000. The rest ($125,000) is split equally between the two children. If the wife was not alive, then the children would inherit everything in equal shares, i.e. $200,000 each.
Dying without a will raises particular problems if a husband and wife die together. For example, they are killed in a car accident and have no children. If the wife dies instantly and the husband dies later in hospital, then using the formula, all of the wife's assets pass to the husband. But this husband is dead too, so his assets, which now include her assets as well, pass to his next of kin. The net result is that the wife's family miss out completely, because she died first and her assets immediately passed to her husband.
It is always best to getlegal advice if you are the dependent/family of a person who dies without leaving a will. The rules of inheritance are sometimes complex, and it is important to make sure you receive what you are entitled to inherit.
What about lost wills?
This is more common than you may think. Of course you should look very hard for a lost will, including asking the bank and the deceased's solicitor and accountant (and perhaps a trusted friend). It's also worth checking trustee companies placing an advertisement in newspapers and the Law Society Journal - this would alert a solicitor who may have made the will. If there is no will the estate will be treated as an intestacy, and the estate distributed according to the formula under the Wills, Probate and Administration Act.
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