What happens if I don’t have a Will?
If you die without leaving a valid Will, you die ‘intestate’. Dying intestate may undue uncertainty and complexity for your loved ones that could have been avoided with a valid Will.
No control over how your assets are dealt with
If you die without a will, your assets may not be distributed according to your wishes. Instead, they will pass according to a statutory formula which varies throughout each state and territory in Australia.
In New South Wales, for example, the Succession Act 2006 (NSW) lists beneficiaries in order of next-of-kin, from spouse (or a spouse together with any children from a previous relationship), children, grandchildren, parents, brothers and sisters, nephews and nieces, then grandparents, uncles and aunts and first cousins. In the unfortunate event that there are no eligible beneficiaries of your assets, the Crown (essentially the state or the government) may receive everything.
As the New South Wales legislation prioritises spouses, this may be a problem where a married couple has separated but is still legally married prior to the death of the deceased. The separated husband or wife will still be deemed a spouse and may be entitled to the whole estate. Further, certain categories of children, such as stepchildren, biological children who have been adopted and children who were born via surrogacy agreements, may not be provided for on intestacy.
The best way to ensure your assets are distributed to the persons and organisations you wish, is to make a valid Will and keep it up to date.
No control over guardianship for children
If a parent dies with children under the age of 18, the surviving parent would generally undertake the role as the sole caretaker of the children, which may not be in line with your wishes (for example, you may wish to appoint someone else, a “guardian”, to act with the surviving parent). On the other hand, if there is no surviving parent, then the court may appoint a guardian. That appointed guardian may not be the person who you would have chosen to take care of your children.
Avoid the administration headache for your family
If you die without leaving a Will, your next-of-kin may apply to the court for Letters of Administration. This allows the Administrator (the person who is appointed by the court) to administer the deceased’s estate. If there is no next-of-kin or no-one willing to apply for the grant, then the court may grant administration to the NSW Trustee & Guardian (or Public Trustee in the Australian Capital Territory) or any other person the court thinks fit. The administration process can be lengthy and confusing, as compared to the relatively straightforward process of obtaining a grant of probate (for a valid Will).
By leaving a valid Will, you could instead appoint as your Executor, one or more persons who you know and trust to make decisions about your assets, that will be in the best interests of your beneficiaries.
Why have a (valid) Will?
Having a valid and properly drafted Will gives your loved ones clear direction as to how you want your assets to be distributed and assists them to administer your estate with minimal complication. It can also protect your vulnerable beneficiaries and their inheritance from being taken in a martial or commercial breakdown and ensure your estate does not pass to someone you do not want to inherit your assets.
Importantly, having a Will that does not comply with the formal legislative requirements may be as good as having no Will at all. For that reason, it is important that you seek specialist legal advice to ensure that your Will is not only legally valid, but is also drafted appropriately to give effect to your objectives.
Clear Law is the specialist estate planning law firm that provides estate planning services to clients of Dixon Advisory. To find out more about Clear Law, visit https://clear.law