Intestacy:  What happens to my estate if I die without a will?

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February 25, 2018

Mark Barrett

Lawyer

A person is said to die intestate where no effective will has been left to dispose of the person’s property on death. The person may die totally intestate or partially intestate (where a will disposes of only part of the person’s property). In either case there are statutory rules which provide for the distribution of the person’s property in the absence of an effective will.

"Most people spend more time and

energy going around problems than in trying to solve them"

– Henry Ford

These rules, referred to generally as schemes of distribution on intestacy, or rules of descent or inheritance of property, determine who is to receive an intestate’s property and how much each is to receive.

 

These rules are ‘default’ provisions which distribute the estate of a deceased person in the absence of an effective testamentary disposition by that person.

 

In Victoria the Administration and Probate Act 1958 – Part IA provides for the ‘default’ provisions.  In summary these provisions are as follows:

 

The term partner includes a person who was either married to, in a registered or unregistered domestic partnership with the intestate or registered caring partner immediately before the intestate’s death. There is a minimum requirement that an unregistered partner has lived with the intestate for a continuous period for at least two years prior to death or the relationship has resulted in the birth of a child. There can be multiple partners.

 

Survivor requirements: Section 70C

The beneficiary under an intestate estate is not entitled to participate in the distribution of the estate unless they survive the intestate by at least 30 days.

 

Partner and no child or other issue: Section 70J

If an intestate dies leaving a partner (but no children or other issue), the partner is entitled to the whole of the intestate's residuary estate.

 

Partner and issue of that partner: Section 70K

if the intestate dies leaving a partner, and children or other issue who is also a child or other issue of that partner, the partner receives all of the intestate’s residuary estate. This does not apply is an intestate leaves more than one partner or a child or other issue who is also not a child or other issue of the intestate’s surviving partner.

 

Partner and child not the child of that partner: Section 70L

if the intestate dies leaving a partner, and a child or other issue who is not the child of that partner, then:

 

  1. if the intestate’s residuary estate is worth less than the statutory legacy amount (currently $451,909) then the partner receives the whole of the estate, including the personal chattels of the intestate.
  2. if the intestate’s residuary estate is worth more than the statutory legacy (currently $451,909) then:

 

  • the partner is entitled to the personal chattels, the statutory legacy amount (plus interest from the date of death) and 50% of the balance of the intestate's residuary estate; and
  • the children of the intestate receive the remaining 50% of the balance of the intestate’s residuary estate.
  • If one or more of the intestate’s children predeceased the intestate leaving children who survived the intestate then the share of the deceased child is to be divided between that deceased child’s children and so on.

 

More than 1 partner and no child: Section 70Z

if an intestate dies leaving multiple partners (and no children) the partners are entitled to 100% of the intestate’s residuary estate:

 

  1. If there is a distribution agreement, in shares in accordance with that agreement; or
  2. in accordance with a Distribution Order from the Court; or
  3. in equal shares.

 

More than 1 partner and child or issue of one or more of those partners: Section 70ZA

if an intestate leaves more than one partner, and a child or other issue who are also a child or other issue of one or more of those partners, the partners are entitled to the whole of the intestate’s residuary estate:

 

  1. If there is a distribution agreement, in shares in accordance with that agreement; or
  2. in accordance with a Distribution Order from the Court; or
  3. in equal shares.

 

More than 1 partner and child or issue not the child or issue of one or more of those partners: Section 70ZB

if an intestate leaves more than one partner, and children who are not children of those partners, then the partners receive:

 

  1. to share the personal chattels of the intestate by distribution agreement, by Distribution Order, or in equal shares;

     AND

      2. if the intestate residuary estate is worth less than the statutory legacy amount (currently $451,909) then the partners

        entitled to 100% of the intestate’s residuary estate by distribution agreement, by Distribution Order or equally;

     OR

    3. if the intestate’s residuary estate is worth more than the statutory legacy amount (currently $451,909) then:

       o then the amount of the statutory legacy shall be paid to the partners by distribution agreement, by Distribution

          Order or equally (plus interest on that amount from the date of death);

         o one half of the balance of the intestate’s residuary estate shall be paid to the partner(s) by distribution agreement,

           by Distribution Order or equally;

         o any children of the intestate are entitled to share in the other half of the balance of the intestate’s residuary estate

          (and if more than one, equally).

 

No partner but leaves children: Section 70ZG

if the intestate leaves no partner but leaves a child or children, the residuary estate is to be distributed to the surviving child (and if more than one, equally).  If any of the children predecease the intestate leaving children of their own, then the children of the deceased child shall receive the share which their deceased parent would otherwise had received.

 

No partner, no child: Section 70ZH

if the intestate leaves no partner and no children, the intestate’s residuary estate must be distributed equally between the parents and only one parent, the parent is entitled to the whole residuary estate.

 

No partner, no child, no parent: Section 70ZI

if the intestate leaves no partner, children or parents, the siblings of the intestate (and if more than one, equally) receive the intestate's residuary estate. If any of the siblings predecease the intestate, leaving children of their own (i.e. the nieces or nephews of the intestate) then those children (if more than one, equally) shall receive the share of the intestate’s residuary estate that their deceased parent would have otherwise received.

 

No partner, no child, no parent, no sibling and no issue of a sibling: Section 70ZJ

if the intestate leaves no partner, children, parents, siblings or children of deceased siblings, then the grandparents (and if more than one, equally) receive the intestate’s residuary estate.

 

No partner, no child, no parent, no sibling, no issue of a sibling and no grandparent: Section 70ZK

if the intestate leaves no partner, children, parents, siblings, children of deceased sibling or grandparents, the aunts and uncles (and if more than one, equally) receive the intestate's residuary estate.  If any aunts and uncles predecease the intestate, leaving children of their own (i.e. cousins of the intestate) then the children of the deceased aunt or uncle (if more than one, equally) shall receive the share of the intestate’s residuary estate that the aunt or uncle would have otherwise received.

 

No person entitled to take estate: Section 70ZL

if there is no person entitled to the Estate of an intestate under this Part, then the intestate’s residuary estate is taken to be property that has no owner and passes to and belongs to the Crown.

 

In summary, without a Will, you risk having no control over who benefits from an estate and the proportions in which they benefit.  You have no control over who administers your estate.  There is no protections and special clauses built into the distribution which may disadvantage beneficiaries.  There is no nomination of guardians for your children.  The costs of administering your estate may be more expensive.

 

 

We recommend that you consider having in place a properly constructed Will to ensure that you decide on how your estate is distributed upon your death.

 

Contact Malkin Lawyers.  We offer fixed price Wills for individuals and partners.  Enquire on our discounted package deals for 2 mirrored will and Powers of Attorney.

 

 

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