Making Sense of Intestacy
Where a person dies without any indication of how his or her estate is to be distributed, the person is said to have died ‘intestate’. Intestacy comes in two forms, total intestacy and partial intestacy. In the latter form, although a will may exist detailing the distribution of part of his or her estate, the remainder of the estate is left in a kind of ‘limbo’.
As an example, a deceased may purchase a property in the final years of his or her life, but fail to update his or her will to reflect this purchase. The question then becomes for the executor – to whom does this property go to?
Fortunately, a number of rules exist which govern distribution in the case of intestacy – these rules should give you a rough idea of what your rights are if you are a beneficiary of an intestate.
Who Gets What?
The Administration and Probate Act 1958 (Vic) provides fairly clear-cut rules about how an intestate estate is to be distributed and in what order.
The Act provides a kind of ‘hierarchy’ of distribution, and may be summarised as follows:
- 1. If the deceased leaves a spouse or domestic partner, but no children, then the spouse or domestic partner will receive the whole of the deceased’s estate;
- 2. If the deceased leaves a spouse or domestic partner as well as children, his/her spouse or domestic partner will receive the first $100,000 of the estate and one third of the residual estate, while the children will receive the remaining two thirds divided equally;
- 3. Where there is no spouse, domestic partner or children, then the parents of the deceased will receive the whole of the state. If the parents of the deceased have already passed away, the estate will pass to the deceased’s siblings.
- 4. In the unlikely event that the deceased has no spouse or domestic partner, children, parents or siblings, the Administrator of his or her estate will trace the deceased’s ancestry and attempt to find any living relatives – if a living relative is found, the entirety of the deceased’s estate will pass to them.
- 5. In the event that all of the above fails, the Government will receive the entirety of the deceased’s estate.
The above hierarchy is an extremely general overview of the operation of intestacy rules, and of course not all cases will fit within this framework. In these circumstances, the Courts have developed alternate means to provide the best and fairest distribution in the event of intestacy.
Intestacy Rules Are Borne of Practicality – Nothing Else
The important thing to take away from these rules is that they provide a one-size-fits-all approach to the distribution of a deceased’s estate. More often than not, the ‘hierarchy’ of distribution will not fit a will-maker’s idea of what is a fair and equal distribution for his or her beneficiaries. Intestate estates often find themselves at the core of lengthy and expensive litigation, and more often than not, they only serve to add to the emotional stress and difficulty experienced by surviving family and friends after the deceased’s passing.
The easiest way to avoid the various pitfalls presented by intestacy is simply to ensure that you have a will that is kept up to date and includes all of the significant assets you posses. Not only will this save your family from the stress and divisiveness that intestacy breeds, but it will ensure that your estate is divided exactly how and to whom you want. Get in touch with an Estate Lawyer to know more about Inheritance and Estate Disputes.