In 2018 a survey by website Finder.com produced the alarming result that more than half of Australians do not have a will. This could equate to every second Australian household being left in the lurch should it lose a loved one. In New South Wales, only 44% of adult citizens have taken the effort of making a Will. The relatives of the remaining 56% are unaccounted for in Will Registers throughout the state. So, what happens to you or your loved one if they pass away without having left a will?
You could be one of those 1 in 2 Australians in that situation. So what happens if a close family member does not leave behind that pivotal legal document before their death? Well Ch 4 of the Succession Act 2006 (the Act) steps in to fill that vacuum with a system of distribution known as the “intestacy rules.”
In case an individual has left behind a spouse but no issue (i.e. children) that spouse will be entitled to the entirety of the estate left behind by the deceased. A spouse under section 104 of the Act is defined as someone who was married to the person immediately before their death or a person who was in a domestic relationship with the intestate (i.e. deceased person).
Such a domestic partnership has to fall under the definition of “relationship” under the Relationships Register Act 2010 (NSW). This requires a relationship which has been going on for a period of at least two years without break or a relationship which has resulted in the birth of a child.
If there are more than one of these spouses they are entitled to the whole of the estate in shares (see s 122 of the Act) which the Supreme Court deems “just and equitable.” This requires a “distribution application” to the Court under section 126 of the Act.
What If The Deceased Has Left Behind A Spouse With Their Children?
If the deceased has left behind a spouse with their children the spouse is still entitled to the whole of the estate. But in case the intestate has left behind a spouse and children who are not from the relationship with that particular spouse, the following assets will be the only entitlements of the spouse:
- The deceased’s personal items such as clothes, jewellery and toiletries; and
- A fixed sum of $350,000 as statutory legacy. In case this is not paid to the spouse within a year this amount will be adjusted for CPI along with interest; and
- Half of whatever remains.
As can be understood so far from a purview of the Act, there is a legal preference for the rights of spouses to acquire the estate of the deceased. In case there is no surviving spouse the estate then moves on to children. These include adopted children who are explicitly included within the definition of “children” under s 109 of the Act. If there are no children the estate passes on to relatives in the following order:
- Parents; (divided equally between the mother and father if they are both still living, and wholly to the living parent of one is deceased, see s 128 of the Act).
- Siblings; (divided equally where there is more than one sibling, and wholly in case there is only one surviving sibling, see s 129 of the Act).
- Aunts and Uncles;
Each category cannot take the estate in shares at the same time. Rather, each category has to be exhausted before the estate moves on to the next category, i.e. siblings do not inherit in the lifetime of the parents and so on.
Are Siblings Entitled To Shares From The Estate?
Where a sibling or an aunt and uncle is also deceased but has left children, that deceased relative’s children are also entitled to shares from the intestate. In other words, if your uncle or aunt has died after your parent, then while the estate is being divided between the rest of your aunts and uncles, your own deceased parent’s share goes to you or is divided between you and your siblings.
Likewise, if your cousin has died without leaving behind a living spouse, child, parent, sibling, nephew or niece and your own parent are also deceased, then while the estate is being divided between your aunts and uncles, then your parent’s share of that cousin’s estate will also go to you or be divided between you and your brothers and sisters (see s 131 of the Act).
What If A Person Dies With No Relatives?
In case there are no relatives of the deceased closer than the degree of second cousins, the estate goes to the government (the “Crown”). However, second cousins, as well as other parties such as the deceased’s friends or charities who could have reasonably been expected to be bequeathed shares by the deceased, can apply for the estate. Such applications to the court are based on merit.
Navigating the passing of a loved one can be a very difficult time. Many people are unfortunately taken advantage of because they do not understand what they are entitled to. This makes it exceedingly important to make sure arrangements have been made in advance. Contact us today for more information.