What happens if I die without a Will?

A recent Finder.com.au survey has revealed that 52% or 9.9 million Australians do not have a Will. Victoria has the highest percentage, with 54% of Victorians not having a Will. The most common reason given in the survey of why people do not have a Will is because “they just have not got around to it”.

If you’re one of those people without a Will, you might be wondering – what happens to your assets if you die?

When someone dies without a Will in Victoria, they are legally referred to as ‘dying intestate’.

For people who die intestate in Victoria, their Estate is distributed according to the rules laid out in the Administration and Probate and Other Acts Amendment (Succession and Related Matters) Act 2017 (Vic) (also known as Rules of Intestacy). Other Australian states have similar but slightly different rules.

Below is a summary of how the Victorian rules determine who the beneficiary of your Estate will be in Victoria, dependent on who your next of kin is/are:

1. One partner* (*partner is considered a spouse, de facto partner or registered caring partner) and no children, partner takes the whole of the estate of the deceased

2. One partner and child/ren of that relationship, then the partner will benefit from the whole of the estate

3. One partner and children born of a different relationship, then the partner will receive all the personal chattels, the 1st $451,909* (*2017 amount increasing with CPI) and 50% of the balance with the remaining 50% amongst the children

4. Multiple partners and children, the Estate may be divided:

   (a)   Under a distribution agreement;

   (b)   In line with a distribution order from the Court; or

   (c)   In equal shares

5. No partners, the estate is divided equally amongst children (and if a child of the deceased has already passed away, that deceased child’s children take equally)

6. No partners and no children, then the estate is divided equally between parents of the deceased

7. If the parents have predeceased, then equally between siblings

8. If there are no siblings, the rules keep moving through the hierarchy of the family tree until reaching first cousins, if necessary

9. If a relative cannot be found, the State Government of Victoria will ‘inherit’ the Estate.

This distribution formula may not match with your intentions of who you want (and need) to provide for after your death. From my personal experience, some of the difficulties of dying intestate are:

• You have no control over who benefits from your estate and how much they receive of your Estate

• Your assets may end up with estranged family members

• You have no control over who will be the Administrator of your Estate

• There is no protection consideration for beneficiaries that a Testamentary Trust may offer

• There is no tax minimisation consideration for the beneficiaries that a Testamentary Trust may offer

• You do not have the opportunity to nominate a guardian for your children

• You do not have the opportunity to nominate and make a provision for someone to care for your pets

• There may be a dispute as to whom is the ‘next of kin’

• If you are in a de facto relationship, there may be a dispute between your family and your de facto as to the legitimacy of your de facto relationship

• If you are separated but not divorced from your estranged spouse, they may be eligible to the whole of your Estate.

 Quite often, much of the uncertainty and stress that is created for family members by the deceased dying intestate can easily be averted by having a properly drafted Will. This Will should clearly outline your wishes and intentions, appoint a capable and trustworthy executor/s and clearly state your choice of beneficiaries who you want to benefit from your Estate.

Authored By: Wills and Estate Lawyer, Mark Murnane