Dying without a valid Will is referred to as dying ‘intestate’. Dying intestate can create additional challenges for your family, who are left without clear instructions about how to deal with your estate. It can also create outcomes you never intended regarding the beneficiaries of your assets, especially if you are a part of a blended family or have complex personal relationships.
This article provides an overview of what happens when you die without a Will and highlights why having a legally sound Will is so important. The information is general only and does not constitute legal advice, which you should seek from an experienced professional.
The Process After Dying Intestate
In Western Australia, if you die intestate, what happens to your estate is determined by the Administration Act 1903 (WA). Your assets will be distributed according to a fixed formula.
Typically, your surviving spouse or de facto partner (or other family member with an interest in the estate) will apply to the Supreme Court for letters of administration. This is a court order that gives them the legal authority to deal with your estate.
The process of applying for letters of administration can be time-consuming and expensive, adding to your family’s stress and grief. Once appointed, the administrator’s duties include:
- Identifying and collecting your assets
- Paying off any outstanding debts, funeral costs, and taxes
- Distributing the remaining estate according to the rules of intestacy
The main issue here is that the law’s formula for distribution may not reflect your wishes.
How Your Intestate Estate is Distributed
The law in Western Australia has a hierarchy for who inherits your estate when you die intestate. The distribution depends on the value of the estate and who survives you. The formula can be quite complex, but the following provides a general breakdown of some common scenarios.
1. If you leave a spouse and children
- If the value of the estate (other than household chattels) does not exceed $472,000: Your surviving spouse (or de facto partner) will inherit the entire estate.
- If the value of the estate (other than household chattels) exceeds $472,000: Your spouse receives all your household belongings, the first $472,000 of the estate, plus one-third of the remaining assets. Your children will share the other two-thirds of the remaining estate equally.
2. If you leave a spouse but no children
- If the value of the estate (other than household chattels) does not exceed $705,000: The entire estate will pass to your surviving spouse (or de facto partner).
- If the value of the estate (other than household chattels) exceeds $705,000: Your spouse (or de facto partner) will receive the first $705,000 of the estate (and the household chattels), and half the remaining estate, with the rest divided between surviving parents and siblings (or siblings’ children) as per the legislative hierarchy. In this case, if there are no surviving parents/siblings/siblings’ children, the surviving spouse takes the whole of the estate.
3. If you leave children but no spouse
Your children will inherit your entire estate to be divided equally among them. If one of your children has passed away but has children of their own (your grandchildren), their share would generally be passed on to them.
4. If you leave no spouse and no children
Your estate is distributed to your other relatives in a specific order of priority, as per the legislation.
Note, this is a general guide only – the legislation details precise entitlements and adjustments for blended families, etc., and there is also a component for interest on the statutory amounts, which are subject to Ministerial review.
The Importance of a Valid Will
The rules for the distribution of an intestate estate are rigid and may not consider your unique circumstances or align with your intentions, especially when it comes to blended families, de facto partners, and stepchildren. This can lead to unintended consequences and uncertainty.
The best way to ensure your wishes are followed is to create a valid Will. A Will gives you control over who benefits from your estate and who manages the process. It allows you to:
- Choose an executor
- Make specific gifts to individuals or charities
- Ensure all your children, including any stepchildren, are provided for in the way you see fit
- Protect your partner and family from unnecessary legal and financial stress
While it is possible to use a Will kit, it is often a much safer choice to have a lawyer prepare your Will. A lawyer will ensure the document is legally sound, reflects your true intentions, and is properly executed, reducing the risk of it being challenged after you die.
If you or someone you know wants more information or needs legal help or advice, please call 08 9336 6300 or email [email protected].