A Will is an important legal document that states how you want your property and assets to be distributed when you die, to whom (your beneficiaries) and who should manage the process (your Will’s executor).
If someone dies without a valid Will, they’re said to have died “intestate”. In such cases, intestacy laws apply, and the laws of the state or territory in which they live(d) then decide how their estate is administered.
– In other words, if you die without a Will, it’s the laws set by the government that determine how your estate is distributed, not you.
To add to the complexity, intestacy laws vary depending on where you live.
Intestacy laws have strict hierarchies in terms of who receives an estate. A spouse will usually be the first in line, but how the estate is divided and distributed (between a spouse and their remaining children, for example) can differ.
Typically, the process is handled by the Supreme Court, which appoints an administrator to manage the deceased estate.
While all Australian states and territories are similar in giving the next of kin priority to access a deceased estate, there are differences, including the monetary thresholds that determine how the estate’s assets may be shared among the deceased person’s spouse and children.
In some states and territories, the next of kin must apply to the Supreme Court to become administrators of the estate. (In New South Wales, this involves applying for “Letters of Administration”.) It’s only when the application is approved that they can then begin to divide the estate.
The way a deceased estate is divided and distributed can vary depending on the total value of assets and whether there are any surviving children of the deceased.
If a person’s spouse has died, or they have children from a previous relationship, for example, it can be a more complicated (and expensive) process for the Court to determine how assets should be divided and to whom.
So here’s the takeaway: Wills are important documents and a vital part of your estate planning. If you haven’t written one yet, start today. And if you have one already, make sure it’s up to date.
If you need help getting started with your estate plan, give us a call or talk to your solicitor.
For financial advice on estate planning, we’re here to help. Make an appointment by calling Align Financial on (02) 9913 9995.
