Dying Intestate

Statistics show that about 50% of Australians do not have a will. There are a number of different reasons why this is the case including a common misconception that if you die without a will, your family will be able to make sure that your wishes are carried out

If you die without a Will (intestate) your estate will be distributed to specific relatives according to a rigid formula set out by the succession legislation in the jurisdiction where you live.

What you would have intended, or what suits your circumstances, isn’t relevant to the operation of the intestacy rules. Stepchildren won’t be entitled to any part of your estate; your spouse won’t be entitled to all of your estate; and estranged children will be entitled to part of your estate, regardless of how poor your relationship with them was.

I’m in the fortunate position that if I didn’t have a Will and I died intestate my family would ensure that my estate will be distributed how I intended. This agreement is often documented by a “deed of family arrangement”.

Whilst this can remedy the situation there are difficulties. Firstly all persons entitled to the estate under the intestacy rules must agree. If a child under the age of 18 is entitled to part of the estate – being underage, the child is unable to give consent to any agreement.

When you make a Will, you name the most appropriate person you believe as the executor of your estate. Your executor organises your funeral, claim your assets, pay your debts and distribute your estate in accordance with your Will. If you die without a Will, somebody still needs to do these jobs. In the case of intestacy, an administrator is appointed – the job of administrator is open to each person identified as entitled to your estate under the intestacy rules.

Generally, all beneficiaries will need to agree to the proposed administrator being appointed. This can cause complications and delay because beneficiaries might not have trust or confidence in the proposed administrator, particularly in a fragmented family.

Even in instances where all beneficiaries agree to one person being appointed as administrator, problems can still follow. If the deceased person left minor children then those children will be entitled to part of his estate. In such instances the Court won’t appoint somebody as administrator unless that person provides the Court with two people who are willing to personally guarantee (the value of the minor children’s entitlement) that the administrator will carry out their job lawfully.

These guarantors can often be difficult to obtain, causing further stress to the person trying to administer the estate.

If you create a Will all of the above can be avoided.