When someone dies without a valid will, they are said to have died "intestate". In New South Wales (NSW), intestacy laws determine how the deceased's estate is distributed. These laws can be complex and may not reflect the deceased's wishes, underscoring the importance of having a valid will. This article explores what happens if you die without a will in NSW and the steps involved in the intestacy process.
Intestacy Laws in NSW
The intestacy laws in NSW are governed by Chapter 4 of Succession Act 2006 (NSW). This legislation outlines how the estate of a person who dies intestate is to be distributed among their surviving relatives. The primary goal of intestacy laws is to provide a fair and predictable method for distributing the deceased's assets, but the distribution might not align with what the deceased would have wanted.
The order of distribution
When someone dies intestate, their estate is distributed according to a predetermined hierarchy and this distribution depends on who survives the deceased:
- If the deceased person leaves behind a spouse and no children, then the spouse takes the entire estate.
- If the deceased person leaves behind a spouse and children, then the spouse takes the entire estate if the children of the deceased person are also the children of the spouse.
- There is a different mechanism when there are children of the deceased person that are not also the children of the spouse (e.g. the spouse left behind is a step-parent to the children of the deceased person)
- If there is no spouse but there are children, then the children take the entire estate in equal shares. If a child dies before the deceased parent and that child leaves children, then the grandchildren of the deceased person take their parent's share in equal shares.
- If there is no spouse and no children, then the assets of the deceased person/intestate go to any living parents.
- If there is no spouse, no children or grandchildren, no parents, then the assets of the deceased person go to their siblings.
- If there is no spouse, no children or grandchildren, no parents and no siblings, then the assets of the deceased person go to their grandparents.
- If there is no spouse, no children or grandchildren, no living parents or siblings, and no living grandparents, then the assets go to the aunts and uncles of the deceased person, but otherwise to their children, who are the first cousins of the deceased person.
- If all of these options have been exhausted and there are no living people in the above categories entitled to receive the estate, then the estate is said to be bona vacantia which means in Latin "ownerless goods" or "vacant goods" and the government has rights to the property.
The role of the administrator
In the absence of a will, an administrator is appointed to manage and distribute the estate. The process of appointing an administrator involves:
i. Applying for letters of administration
A family member or interested party must apply to the NSW Supreme Court for letters of administration. This legal document grants them the authority to manage the deceased's estate. The court typically grants administration rights to the closest relative, but this can vary depending on circumstances and family dynamics.
ii. Responsibilities of the administrator
The administrator's duties are similar to those of an executor named in a will. These include collecting the deceased's assets, paying any debts and taxes, and distributing the remaining estate according to the intestacy laws. Administrators must act in the best interests of the estate and are accountable to the beneficiaries.
Potential Challenges and Disputes
Intestacy can lead to various complications and disputes, including:
i. Family disputes
Relatives may disagree over the distribution of assets, especially if the deceased's intentions were not clearly documented. This can lead to long and costly legal battles.
ii. Financial hardship
Intestacy may result in financial difficulties for surviving family members who were financially dependent on the deceased but do not receive a sufficient share of the estate under the intestacy laws.
iii. Unintended beneficiaries
The intestacy rules may benefit distant relatives or individuals the deceased had little or no relationship with, which might not align with the deceased's wishes.
Avoiding Intestacy
To avoid the uncertainties and potential conflicts associated with intestacy, it is crucial to have a valid and up to date will. Here are some steps to ensure your estate is distributed according to your wishes:
i. Drafting a Will
You should engage a qualified lawyer to draft a will that reflects your wishes. A properly drafted will can address various scenarios and ensure your assets are distributed according to your preferences.
ii. Regular updates
Regularly review and update your will to reflect changes in your circumstances, such as marriage, divorce, the birth of children, or significant changes in your assets.
iii. Appointing an Executor
Choose a trustworthy and capable executor who will manage your estate according to your instructions.
Conclusion
As this article demonstrates, dying without a will in New South Wales can lead to complex legal and financial challenges for your surviving relatives. Intestacy laws provide a structured method for distributing your estate, but they may not reflect your wishes or the needs of your loved ones. By drafting a valid will and keeping it updated, you can ensure your estate is managed and distributed according to your intentions, providing peace of mind for both you and your family.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.