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What Happens When There Is No Will? Exploring Intestacy

a couple with a laywer going over a will testament legal document on clip board

Introduction

If a person dies without leaving a Will laying out their testamentary wishes, this is referred to as dying โ€˜intestateโ€™. When this happens, an โ€˜Executorโ€™ type figure needs to be appointed as an administrator to distribute assets from the deceasedโ€™s estate. An application to the Equity Division of the Supreme Court of NSW for โ€˜Letters of Administrationโ€™ needs to be made, which is effectively a Court document appointing someone to administer the estate.

The Court will usually approve the person with the greatest entitlement to the estate to be the administrator of the estate and this is typically a spouse or child. Otherwise, the NSW Trustee and Guardian will be appointed as administrator.

Not having a Will may seem irresponsible and while it is the case that not having a Will creates far more uncertainty of outcome and requires family members and the Court to engage in lots of interpretation, there are some reasons for a Will not being established. For instance having minimal assets may mean a person does not feel it is necessary, people who fear death may prefer never to discuss it or being unable to decide on the particulars of a Will.

The Role and Duties of the Administrator

When a person is appointed as an administrator, their primary responsibility is to manage and distribute the deceasedโ€™s assets according to the intestacy rules outlined in Chapter 4 of the Succession Act 2006 (NSW). These rules set a specific order of priority for how the estate is to be divided among relatives, removing any subjectivity in the distribution process.

The administrator must identify all the eligible relatives and confirm their entitlement based on a predefined order of priority. The law groups relatives in categories that follow a particular hierarchy, starting with the deceasedโ€™s spouse and children, followed by parents, siblings, grandparents, aunts, uncles, and cousins. If no living relatives can be found within these groups, the estate may pass to the Crown (state).

Itโ€™s important to note that the administrator must adhere strictly to the intestacy rules and does not have the discretion to distribute assets as they see fit. The administrator must also settle any debts or liabilities of the estate before distributing the assets to the entitled beneficiaries.

Intestacy rules and the order of entitlement

The statutory order basically divides eligible relatives into two parts โ€“ spouses and other relatives. If the deceased is an Indigenous person, the statutory order is subject to exclusion or modification by a distribution order under Part 4.4 of the Act.

Spouse’s entitlements

A spouse is defined as person who was married to the deceased immediately before the death or who was a party to a domestic partnership immediately before the death (which may include a de facto spouse). This does not include ex-spouses (see Succession Act, section 104).

Spouseโ€™s entitlements are set out in Part 4.2 of the Succession Act.

  • If the deceased leaves a spouse and no children, the spouse is entitled to the whole estate.
  • If the deceased leaves a spouse and children, and the children are the spouseโ€™s children, the spouse is entitled to the whole estate.
  • If the deceased leaves a spouse and children, but the children are not the spouseโ€™s children, the spouse is entitled to:
    • the intestateโ€™s personal effects (defined in section 101), and
    • a statutory legacy of $350,000 plus adjustment for CPI from December 2005, and interest if the statutory legacy is not paid in full within one year of the date of death (for the definition of statutory legacy, see section 106)
    • one-half of the remainder (if any) of the estate.
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Multiple spouses

If the deceased leaves more than one spouse, but no children, the spouses are entitled to the whole estate in shares determined by the Succession Act (see below).

Distribution among other relatives

In basic terms, the order of relatives who can inherit if there is no spouse is as follows:

  • children
  • parents
  • brothers and sisters
  • grandparents
  • aunts and uncles
  • cousins

Each โ€˜categoryโ€™ must be exhausted before moving on to the next and once an eligible relative is found, the process stops.

Entitlement of children

If the deceased leaves no spouse but leaves children, the deceasedโ€™s children share the whole estate equally.

If the deceased only leaves children who are the issue of a surviving spouse, those children will not inherit any part of the deceasedโ€™s estate (as the estate will pass to the spouse).

If the deceased leaves a spouse or spouses and children who are not the children of a surviving spouse, and part of the estate remains after satisfying the spouseโ€™s or spousesโ€™ entitlements, the deceasedโ€™s children are entitled to the remaining part equally.

If a child of the deceased has died before the deceased, and has surviving children, those children will take the deceased childโ€™s share equally. This continues through the generations until the entitlement is exhausted. That is, if the deceased childโ€™s child (the grandchild of the intestate) is also deceased, the share will pass to his or her children, i.e. the great grandchildren of the intestate. If the dead child had no children, their share is divided among the intestateโ€™s other surviving children.

Who is a child of the deceased?

The answer has become more complex since the introduction of surrogacy law, artificial insemination and in vitro fertilisation and the right of same-sex couples to adopt. Section 109 of the Succession Act provides that an adopted child is to be regarded for the purposes of intestacy rules, as a child of the adoptive parent or parents.

If you are unsure about whether a particular child is an eligible relative under the intestacy rules you should consult a lawyer.

Parents

Where the deceased leaves no spouse and no children, but has parents living, the parents will get equal shares of the estate. If only one parent is alive, the whole estate will go to that parent.

Brothers and sisters

Where the intestate leaves no spouse, child, or parent, then their brothers and sisters share the whole estate equally. Half sisters and brothers are now specifically included. If the intestate had a brother or sister who died before them, leaving a child or children who survive the intestate, the child or children (the intestateโ€™s nieces or nephews) take the share of the intestateโ€™s deceased brother or sister. This continues through the generations until the entitlement is exhausted.

Grandparents

If the deceased leaves no spouse, child, parent, brother or sister, or issue of a deceased brother or sister โ€“ then the grandparents of the intestate share the whole estate equally.

Aunts and uncles

If the intestate leaves no spouse, child, parent, brother or sister, or issue of a deceased brother or sister (nephew or niece), and no grandparent, the brothers and sisters of each of the intestateโ€™s parents (the intestateโ€™s aunts and uncles) are entitled to the whole estate equally.

Cousins

If an aunt or uncle dies before the intestate leaving a child who survived the intestate (a cousin of the intestate), the cousin or cousins will share equally the deceased aunt or uncleโ€™s share of the estate. This only extends to first cousins. If a first cousin predeceases the intestate, the cousinโ€™s children (second cousins of the intestate) do not inherit.

Why Is Having a Will So Important?

The risk of dying intestate is that your assets may not be distributed according to your personal wishes. The intestacy rules are rigid, and while they aim to be fair and logical, they may not align with what you intended. For example, you may have wanted a particular asset to go to a close friend, a charity, or even a specific family member, but without a valid Will, these wishes cannot be honoured.

Dying intestate also puts additional stress on your loved ones at an already difficult time, as they must navigate the legal complexities of applying for Letters of Administration, dealing with the Court, and ensuring the correct distribution of your estate. Making a Will is the only way to guarantee that your assets are distributed according to your desires, sparing your family unnecessary distress and ensuring a smooth transfer of your legacy.

Conclusion

If you die without a valid Will โ€˜dying intestateโ€™, the intestacy rules determine how your assets are to be distributed. This means the people you intended to be beneficiaries may not receive their inheritance. The intestacy rules determine that your assets will pass to your spouse and then to children, parents, brothers and sisters, grandparents, aunts and uncles and cousins. Making a Will is the only way you can ensure that when you die, your estate will be distributed according to your wishes.

How Burgess Thomson Can Assist with Intestacy Matters

Navigating intestacy laws and managing an estate without a Will can be a complex and daunting process. If you find yourself in the position of being appointed as an administrator or are unsure of your rights to an estate, obtaining legal advice is crucial.

At Burgess Thomson, we specialise in Wills and Estates Law, offering over 60 years of combined experience. Our team provides sound advice and tailored assistance for all matters related to intestacy. Our services include:

  • Guidance for Administrators: We assist administrators in applying for Letters of Administration, understanding the intestacy rules, and effectively managing the estate’s distribution.
  • Legal Advice on Entitlements: We offer clear advice on your rights and entitlements under the Succession Act, ensuring you understand how the estate will be divided.
  • Personalised Support: Each estate is unique, and our solicitors provide personalised counsel to address your situation’s specific circumstances and needs.
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Making informed decisions about your estate or dealing with an intestate estate doesnโ€™t have to be overwhelming. With our expert guidance, you can ensure that the process is handled with care and precision.

At Burgess Thomson, we are known for our attention to detail, professionalism, and dedication to our clients. If you need help navigating intestacy law or wish to discuss your estate matter, please don’t hesitate to reach out.

Contact us at (02) 4929 5602 to arrange an appointment with our experienced team.

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