Creating a valid last will and testament is the standard way of making sure your property is distributed in the way of your choosing after your death. It’s important to ensure you complete this process, and that you follow all the appropriate procedures, because the alternative — dying without a will — can become a great source of confusion and complication for those you’re leaving behind.
Dying without leaving a will in Victoria is known as “dying intestate.” This process is governed by rules which were most recently updated in 2017 and which give the court system guidelines about how to administer the estate and distribute your assets. A quick look at what happens to a person who has died intestate can demonstrate why a valid will is an essential way to express your wishes for how your possessions are divided.
How estates are distributed without a valid will
The relevant piece of legislation in Victoria, the updated version of the Administration and Probate Act 1958, offers a few scenarios that could play out after a person dies. In the most straightforward instance, there is no legally valid will at all and the whole estate must be divided up by the courts. In other cases, there is a will that does not completely cover all the deceased’s assets and the courts will only deal with the remaining portion of the estate.
An intestate person’s estate is distributed among that individual’s family members, according to a hierarchy laid out in the law. This process involves applying to the Supreme Court of Victoria for a Grant of Letters of Administration. In the case that a person dies with no will and no living family members, the deceased estate becomes property of the state government of Victoria. The following parties will be eligible to receive the assets, in order of prominence:
Spouses or other partners
Someone who dies intestate with a husband, wife or other partner still living leaves their estate to that person. The law in Victoria does not just apply to marriages: De facto partnerships and domestic relationships spanning two or more years of cohabitation, or which have produced a child, are eligible. Both same-sex and different-sex partnerships have the same inheritance rights. Complex situations may arise if someone dies with more than one eligible partner. In these cases, the parties may agree to a division of the estate in writing, one may apply for a distribution order, or all may be awarded an equal division by default.
Spouses and children
When both a spouse and children from that relationship survive a person with no will, the partner is the person who claims the whole amount. This differs from the pre-2017 rule, in which the spouse received $100,000 and one-third of the estate, with the remainder going to the children. When a partner survives, as well as children from a different relationship, the partner receives personal chattels, the first $451,909 and 50% of whatever remains, with the rest divided among the children.
For people who die with no valid will and without a domestic partner, children are next in line to inherit. There is an equal division of the estate to children, as well as to grandchildren whose parents, the children of the intestate, have passed away. Victoria Legal Aid points out that in some cases, children from a previous relationship may receive some of an intestate’s assets, even if that person has a currently living spouse. However, this level of division only occurs if there is significant value in the estate following funeral costs and the resolution of expenses, typically over $500,000.
A person with no spouse or domestic partner and no children but with living parents leaves their estate to their parents equally. In the case that only one parent is still living, that person receives the whole estate.
Siblings of an intestate stand to receive the contents of the estate if that individual dies without any living parents, partners or children. The division of assets is made evenly. If a sibling passes away before the intestate but leaves a child or children of their own, those nieces or nephews become the inheritors, in equal shares.
Grandparents are in line after partners, children, parents, siblings and those siblings’ children. As in other cases, each living grandparent receives an equal portion of the estate.
Aunts, uncles and cousins
Aunts and uncles are the next in line after grandparents. If this scenario occurs and an aunt or uncle has died but left children behind, those children evenly divide the share that would have gone to the parent related to the intestate. If no such relatives exist, the estate becomes property of the Crown.
How other complex inheritance scenarios are handled
While dying intestate is the most basic example of a situation when the courts have to take over the distribution of a deceased estate, there are other issues that may complicate an inheritance. For example, when beneficiaries die before the testator and the will has not been updated, the issue may be treated as if the person was intestate, at least for the assets set aside for that individual.
There are also challenges to the will, which may take a few forms. Dependents who believe they have not been adequately compensated, and the deceased had a “moral duty” to provide for them, may bring challenges. Furthermore, if it appears the will is not valid because of a lack of signature, no witnesses or another similar issue, it may become the subject of a challenge. Even a simple lack of clarity in its terms or a dispute with the executors or trustees appointed might lead to this scenario.
If you are interested in challenging a family member’s will or ensuring your own will is legally sound and thus less likely to attract challenges, it can help to seek legal advice from a will dispute expert. Book a free appointment by contacting Gerard Malouf & Partners on 1800 004 878 or make your enquiry by email.