What happens if you die without a will?
Dying without a will means the law decides how to distribute your estate among relatives, causing delay, complications, and legal expenses. Make a will.
Dying intestate – or without a will – calls on the law to decide what happens with your assets. In the case that a person dies and does not possess a will, or the will is not valid, the deceased’s closest next of kin (generally their partner or child) is entitled to apply to the Supreme Court of Victoria for a Grant of Letters of Administration. Letters of Administration empower a person or trustee company to administer the estate of the deceased.
An ‘estate’, simply put, is a person’s net worth at any given point in time. It is the sum of all assets, less any debts or liabilities at that time. The types of assets that may form part of an estate include:
- real property;
- personal items such as jewellery, art, antiques, etc;
- a document detailing any assets held in trust;
- bonds; and
- bank accounts.
Superannuation is not an asset. It is a benefit held in trust by your superannuation fund, on your behalf. At your death, it is considered a ‘death benefit’, and you need to enter into a separate process with your superannuation fund to determine who your superannuation will go to after you die.
In considering how to distribute an estate for which there is no will, or the part of an estate for which there is no will, Victorian law has established a hierarchy of who should receive your estate, known as the ‘laws of intestacy’. If you leave behind a partner when you die – defined as a spouse, domestic partner, or registered caring partner – and you do not have any children from another marriage, your estate becomes their property entirely. This is because there is an assumption that your partner will take care of your common children.
However, if you have a partner but leave behind children from another marriage, the rules are somewhat more complex. In this case the law seeks to strike a balance between the needs of your partner and common children, and those other children you have for whom the partner may not directly provide. In this case, the partner receives:
- The first $499,210 of your estate, known as the ‘statutory legacy’,
- Any interest on the statutory legacy from the time of death to the time of distribution,
- Any chattels, and
- One half of what remains in the estate after these distributions.
The deceased’s other children then receive the other half of what remains in the estate, in equal shares.
If you do not leave behind a partner, but you do have a child or children, the estate is distributed among them equally.
If you die with no partner or children, the estate is distributed in accordance with the following order:
- Aunts and uncles
If there are no such living relatives, the estate passes to the government.
An intestate person’s estate is not immediately distributed to the people in this order, however. If someone who would be entitled to receive whole or part of the estate dies within 30 days of the deceased, they are treated as if they had died before the deceased in question, and their entitlement is void.
There is often some delay between a person’s death, granting of Letters of Administration, and the actual distribution of the estate, particularly where there is no will. However, some people who may have relied on the deceased’s assets during their life and require the use of those assets urgently, may have a portion of their entitlement distributed early, by the bank or other entity which holds cash and other assets. A bank will also generally pay funeral expenses directly from the deceased’s estate too, and this amount is deducted from the total amount available for distribution to the beneficiaries.
Dying without a will, however, often leads to unnecessary delays, complications and legal expenses for those left behind. Taking the time to create your will, by comparison, is a much better way to have your assets distributed in the way that you want after your death.
Contact Warlows Legal today for a free consultation about creating or updating your will.
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