The importance of a Will
Getting a will is extremely important to ensure that your property and possessions are distributed in accordance with your wishes once you pass away. There are various steps involved in the process of distributing the estate if one dies intestate, i.e., dying without a legal will.
What are the steps if one dies without a will?
If there are next of kin:
- The deceased’s next of kin may need to apply for a Grant of Letters of Administration to deal with the estate left behind, which is handled by the Supreme Court of Victoria. Under the Administration and Probate Act 1958 (Vic), they are entitled to portions of the estate.
- Next of kin is defined as: a person’s closest blood relatives, i.e., lawful spouse or domestic partner, children – excluding stepchildren – but including children adopted by the deceased, grandchildren, parents, brothers or sisters, or remoter next of kin. However, the distribution is set out by a statutory formula. This formula sets out who benefits from the estate and in what proportions.
If there are no next-of-kin:
- If there are no close living relatives, the State must seize control of the estate and organise it according to their wishes. This is usually administered by the State Trustees.
What does dying without a will mean for you?
Dying without a will means that the deceased will have no control over who distributes their estate and how it is distributed. Without specification of who their executor is within a will, anybody who has an interest in administration of the estate, for example a creditor or a beneficiary, can apply for administration. Without a will, additional stress may be caused to the family, who will have to sort out the estate and encounter potential conflict between the beneficiaries.
The Importance of an Enduring Power of Attorney
Getting an Enduring Power of Attorney is also vital to ensuring that one’s estate is taken care of by someone they nominate if they become incapacitated. Incapacitation may be rendered through dementia, mental illness, brain injuries, intellectual disabilities, or other situations.
Why is this important?
Having this document will help to eliminate the expense and stress on one’s family having to go through the Guardianship and Administrative Tribunal to be appointed as the Attorney. This may mean that the Attorney making decisions on the incapacitated person’s behalf is not their preferred choice. Even then, Guardianship orders are usually for a short time and give the guardian limited powers. Where there is no one else that is close to you, the Tribunal can appoint the government to make decisions on your behalf. This will be administered by the State Trustees.
What happens when the state controls my estate?
While administration by the government may consider your needs and deal with your estate accordingly, there is also the risk that, like dying intestate without next-of-kin, they seize control of your estate and do with it according to their wishes.
Risks of a state-controlled estate
In Victoria, it is a criminal offence to identify someone as a client of the State Trustees, and in most jurisdictions, this is illegal even if their order has been revoked or they have died; family members can’t speak out either. This may prevent one that has been dealt with unfairly by the State Trustees from seeking justice for basic human rights infringements. There is also no public accountability or transparency framework assigned to the State Trustees, which can be dangerous. As reported in an ABC News article by Anne Connolly and Hannah Meagher published June 2023, there have been situations where actions of State Trustees, upon seizing the estate of incapacitated persons who did not have a Power of Attorney, were shocking. Some claimed misleading information; one woman stated that the State Trustees promised only $8 a month in fees when in fact she paid almost $500 a month. There were also claims of major financial mismanagement, leaving clients with little money to live on, so much so that they went into debt.
Therefore, it is important to have both a will and a power of attorney. It will ensure that you have control over the Executor and Beneficiaries are of your estate, and how the distribution will be managed, in the event of death or incapacity.