Invalid wills, passing away intestate, and intestacy rules

When it comes to estate planning, approximately 45% of Australians* pass away intestate.

When this occurs, the estate is distributed in accordance with the intestacy rules of our relevant state or territory.

Passing away intestate may happen not only where we fail to make a will, but also when:

1. The will did not properly dispose of all of our assets.

2. We did not have the mental capacity to make the will in the first place.

3. The will was invalid due to it not being signed and witnessed according to the law.

4. The will was drafted poorly, and the legal rules governing will construction were not followed.

In Australia, states and territories are responsible for making their own succession and inheritance laws, which means there can be variations between them.

As an example of these variations, below is general information on the intestacy rules that apply in certain areas, namely, in New South Wales, Queensland and Victoria.

Please note: This is a broad overview of the intestacy rules applied to several possible scenarios—there can be exceptions, and there also can be other potential scenarios where the intestacy rules apply including multiple spouses, size of the estate assets, and where the estate assets are located.

 

Intestacy rules in New South Wales

Scenario 1: You are survived by a spouse, and you are also survived by children from a previous relationship

A statutory legacy of $350,000 (plus adjustment for CPI), plus personal effects, is distributed to the spouse. And, the remaining balance (if any) of the estate is distributed as follows:

  • One-half is distributed to the spouse
  • One-half is distributed equally between the children (and the children of any deceased children).

Scenario 2: You are survived by a spouse, but you are not survived by children from a previous relationship

The estate is distributed to the spouse.

Scenario 3: You are not survived by a spouse, but you are survived by children

The estate is distributed equally between the children (and the children of any deceased children).

Scenario 4: You are not survived by a spouse, and you are also not survived by children

The estate is distributed in the following ‘down the line’ order:

  • parents
  • brothers and sisters (and the children of any deceased brothers and sisters)
  • grandparents
  • aunts and uncles (and the children of any deceased aunts and uncles)
  • Government (the Crown).

Please note: In the potential scenarios listed above, a beneficiary must survive you by at least 30 days to be entitled to share in the estate. However, this does not apply if its application would result in the estate passing to the Crown.

 

Intestacy rules in Queensland

Scenario 1: You are survived by a spouse, and you are also survived by children

A statutory legacy of $150,000, plus household chattels, is distributed to the spouse. And, the remaining balance (if any) of the estate is distributed as follows:

  • If there is only one surviving child:
    • One-half is distributed to the spouse
    • One-half is distributed to the child (and the children of any deceased child).
  • If there is more than one surviving child:
    • One-third is distributed to the spouse
    • Two-thirds is distributed equally between the children (and the children of any deceased children).

Scenario 2: You are survived by a spouse, but you are not survived by children

The estate is distributed to the spouse.

Scenario 3: You are not survived by a spouse, but you are survived by children

The estate is distributed equally between the children (and the children of any deceased children).

Scenario 4: You are not survived by a spouse, and you are also not survived by children

The estate is distributed in the following ‘down the line’ order:

  • parents
  • brothers and sisters (and the children of any deceased brothers and sisters)
  • grandparents
  • aunts and uncles (and the children of any deceased aunts and uncles)
  • Government (the Crown).

Please note: In the potential scenarios listed above, a beneficiary must survive you by at least 30 days to be entitled to share in the estate.

 

Intestacy rules in Victoria

Scenario 1: You are survived by a partner, and you are also survived by children from a previous relationship

A statutory legacy of $451,909 (plus adjustment for CPI), plus personal chattels, distributed to the partner. And, the remaining balance (if any) of the estate is distributed as follows:

  • One-half is distributed to the partner
  • One-half is distributed equally between the children (and the children of any deceased children).

Scenario 2: You are survived by a partner, but you are not survived by children from a previous relationship

The estate is distributed to the partner.

Scenario 3: You are not survived by a partner, but you are survived by children

The estate is distributed equally between the children (and the children of any deceased children).

Scenario 4: You are not survived by a partner, and you are also not survived by children

The estate is distributed in the following ‘down the line’ order:

  • parents
  • brothers and sisters (and the children of any deceased brothers and sisters)
  • grandparents
  • aunts and uncles (and the children of any deceased aunts and uncles)
  • Government (the Crown).

Please note: In the potential scenarios listed above, a beneficiary must survive you by at least 30 days to be entitled to share in the estate. However, this does not apply if its application would result in the estate passing to the Crown.

 

Moving forward

One of the most important things that you can do prior to your passing is ensure you have a valid will in place.

The alternative—being deemed to have passed away intestate, and having the intestacy rules applied to your estate—may see your estate distributed in a way which is very different to what you expected or wanted.

By seeking professional advice, you can limit your chance of passing away intestate, and ensure the will is drafted to reflect your full intentions and the individual complexities of your personal circumstances.

It is also important to understand that drafting a will is not a set and forget exercise. With this in mind, a good idea can be to review the will at least every five years, or early when a major life event has occurred.

If you have any queries about this article, please contact us.

*NSW Government, NSW Trustee & Guardian. Retrieved from: http://www.tag.nsw.gov.au/wills-faqs.html