The impact of intestacy on Will disputes
When a person passes away with an invalid Will or without a Will altogether, they are said to have died intestate. According to statistics provided by the Supreme Court of Victoria, more than seven per cent of the grants made each year are for intestate estates.
There are two types of intestacy; total and partial intestacy. The latter is relevant to cases where a Will has been created, but it’s incomplete and doesn’t account for all estate assets. Often, this happens because the deceased acquired certain assets, such as property, after writing their Will and failed to update it.
If a person dies intestate, there can be confusion among beneficiaries when it comes time to distribute their assets. There’s no indication of what the testator would have wanted, but a decision still needs to be made on their behalf.
Why intestacy should ideally be avoided
More than half of all Australian adults; the equivalent of 9.9 million people, don’t have a valid Will. This is largely because they haven’t gotten around to it yet or couldn’t be bothered. That said, if you haven’t written a Will that is complete and valid, in the event of your passing, you risk estate assets being distributed in a way you would not have wanted or chosen.
In intestacy cases, the deceased has no real control over what happens to their estate assets, including who benefits and the extent to which they do. If they had preferred beneficiaries, under intestacy laws, these individuals might receive less than desired or even miss out completely.
When a testator dies without a valid Will, they also have no control over who is appointed to administer their estate and, due to court proceedings and the like, the estate distribution process can end up being more expensive. This has the potential to diminish the value of the estate, leaving beneficiaries worse off.
If the deceased has children and doesn’t nominate a guardian in their Will, this could cause further complications and result in an outcome they wouldn’t have chosen themselves. Similarly, the absence of a Will could also mean they don’t provide information regarding who they’d like to be their next of kin.
All of this can significantly impact how those closest to the deceased live out their life after their passing, when they are already managing the emotional stress of the death of a loved one.
The easiest way to avoid the complications of intestacy is for a testator to create a valid Will that is up-to-date and makes mention of all their significant assets. That said, cases where a person dies intestate do occur, and there is a legal process that has been developed to suitably manage the administration of their assets.
When a person dies intestate, what happens next?
When a person dies intestate, those closest to them are of course left with the question of who gets what.
The deceased’s estate can be extensive and include assets of different value, both monetary and sentimental. It’s not as easy as dividing funds between all surviving family members. Even while that approach could seem fair, it would likely still cause conflict and disagreements among those involved.
When it comes time to distribute the assets of a person who has died intestate, the Administration and Probate Act 1958 (Vic) sets out a clear process for the Court to follow. By providing a hierarchy of distribution, it brings structure to the complex decision at hand.
As detailed in the Act, the general process that’s followed is below:
- When the deceased has a surviving spouse or domestic partner, but no children, their significant other inherits their entire estate;
- If the deceased has a surviving spouse or domestic partner and children, their partner receives the first $100,000 of the estate and one third of the residual estate. The remaining two thirds are then divided equally between the deceased’s children;
- When the deceased doesn’t have a surviving partner or children, then the deceased’s parents inherit their estate assets. If their parents have passed away, the siblings of the deceased will become the estate’s beneficiaries;
- In unique cases where the deceased has no spouse or domestic partner, parents or siblings, proceedings can become more complex and drawn out. An administrator of the estate is appointed and takes on the role of finding any living relatives of the deceased. If they are successful in doing this, the deceased’s estate will be distributed to their living relative/s;
- If all of the above fails, the Government will receive the deceased’s entire estate.
The above intestacy rules have been borne of practicality and, of course, not all cases will fit perfectly within this framework.
The deceased has their own unique and often complex personal relationships with family, partners and the like. While the hierarchy detailed in the Act gives people a process to follow when a person dies intestate, more often than not, the division of assets will not fit a will-maker’s idea of what is fair.
If an eligible person is dissatisfied with the outcome, whether they didn’t receive an inheritance or didn’t receive what they believe to be a fair portion of the estate, there is the option to take legal action.
Intestacy and estate disputes
Most commonly, the step-children and/or domestic partner of the deceased will launch a dispute against the estate. They do so under the notion that they didn’t receive adequate provision for proper maintenance and support.
Under the statutory scheme, step-children aren’t automatically considered a child of their step-parent and may not receive an inheritance. If a person dies without a Will, for their domestic partner to benefit from their estate, one or more of the following must be shown:
- They lived with the deceased for at least two years immediately before the person’s death, while in a domestic or de facto relationship with them; or
- They have a child with the deceased; or
- They formally registered their domestic or de facto relationship with the deceased.
All of this said, anyone who is an eligible person has the opportunity to dispute the estate given they have sufficient grounds to do so.
It’s not uncommon for the intestacy rules to lead to legitimate beneficiaries being disinherited but even when this is the case, to gain greater provision, you will need to bring a convincing argument to the Court supporting your claim. This is why it’s generally suggested you get in touch with an estate lawyer before pursuing a case against an estate, whether it’s intestate or otherwise.
An inheritance lawyer can provide you with professional insights into whether you are in the position to contest the Courts decision, the merit of your case and how likely you would be to succeed if you pursued it further. They can also explain the expected proceedings, providing you with guidance and support in what’s already a challenging time.
Szarvas v Tizzano; Muller v Tizzano
In a 2014 Victorian Supreme Court case, a person with two surviving biological daughters and a step-son died intestate. Letters of administration were granted, which saw the two daughters each receive a portion of the estate.
The deceased’s unregistered domestic partner and step-son believed they were not provided with adequate provision for proper maintenance and support and; thus, made a claim against the estate.
Applicant 1: the unregistered domestic partner
The unregistered domestic partner had been in an intimate relationship with the deceased for four years. For two of those years, they lived together and, during this time, she contributed to household expenses. At the time of the deceased’s passing, the applicant was in good health and a comfortable financial situation.
The applicant was no longer living with the deceased at their time of death and given she was in a good financial position, the judge couldn’t see why she would need more provision. Based on the circumstances presented to the Court, the judge also concluded the applicant wasn’t in a ‘domestic relationship’ with the deceased.
This all considered, her plea failed.
Applicant 2: the step-child
The deceased and their step-son had a long-standing relationship, which spanned over 25 years. During this time, they had many interactions that would likely occur between a father and son. The deceased’s mother passed away and the applicant supported them through this. They were in a poor financial situation.
When coming to a decision, the judge took into account the fact the applicant and the deceased’s relationship mirrored that of ‘father and son’. They also noted that the deceased was aware of the step-son’s financial situation.
With this in mind, the step-son was successful in their application.
Speak with an estate lawyer
At Hentys Lawyers, we have over 25 years of handling will disputes. If someone close to you has died intestate and you believe you haven’t received adequate provision, getting in touch with an experienced estate lawyer is a great first step to take.
Enquire with us today to see how we can assist you with your matter, and see whether we are the right lawyers for you.