We’ve previously provided a number of reasons as to why everyone should have a Will, but the reality is that while we all die eventually, not everyone makes a Will before that occurs. So, what happens if you have no Will when you die?
Dying without a Will is referred to as dying ‘intestate’, and the legal process of dealing with your Estate in this context is known as ‘intestacy’. One of the main purposes of having a Will is ensuring your affairs are managed by the people you want to manage them in the manner you want them to be managed. Where you don’t have a Will, you still have affairs that need to be managed, but who is responsible for managing these affairs and how they are to be managed?
The short answer is that we have legislation that prescribes what occurs in the case of intestacy: in Victoria, this is Part IA of the Administration and Probate Act 1958 (Vic), otherwise known as ‘intestacy provisions’. The intestacy provisions apply where a person dies without leaving a Will, or where a person dies leaving a Will that fails to effectively deal with their Estate. For our purposes, we’re only going to focus on the former circumstances.
Who is responsible for managing your affairs?
One preliminary thing to note for the purpose of differentiating dying intestate from dying with a Will is that, where someone dies leaving a valid Will, this Will appoints one or more Executors who are entitled to apply to the Court for a grant of Probate of the Will. In the case of intestacy, instead an Administrator must apply to the Court for a grant of Letters of Administration. The difference in terminology is largely unimportant as an Administrator is empowered to deal with an Estate in substantially the same manner as an Executor. But the key difference is, where there is no Will to identify an Executor, how do we know who should make this application as Administrator?
The short answer is the person with the greatest entitlement to benefit from the Estate.
There is, broadly speaking, a hierarchy of who is entitled to benefit from an intestate Estate. We have prepared this quick one page reference Guide to Inheritance under Intestacy Legislation to explain how this hierarchy operates, although we must note that this is a very broad overview and does not account for more complex circumstances, such as where a person dies intestate leaving multiple partners.
The key is that you start at the top of the hierarchy, and work your way down until you reach the circumstances which apply. For example, if a person dies intestate and leaves a partner and no children, or a partner and children with that partner, the partner gets the whole Estate. If a person dies intestate without a partner or children, their surviving parents receive an equal share of the Estate.
The person who has the greatest entitlement to the Estate is the appropriate person to act as the Administrator and apply to the Court for a grant of Letters of Administration. If more than one person has an equal entitlement, those people are entitled to apply as joint Administrators. For example, where a person dies intestate without a partner or children, but is surviving by both of their parents, their parents are both entitled to apply for a grant of Letters of Administration and can therefore do so as joint Administrators, or one parent can apply as sole Administrator with the consent of the other parent.
How are your affairs to be managed?
While a Will has broad scope to detail specific wishes in respect of different assets and ensure that your Executor is adequately empowered to follow these wishes, as a matter of practicality, the intestacy provisions cannot provide such a broad scope.
The intestacy provisions allow for an Administrator to sell Estate assets so the proceeds can be distributed amongst beneficiaries, or retain Estate assets and transfer assets to beneficiaries in specie (that is, in its current form rather than cash based on its value), but it cannot provide for more complex arrangements such as life interests and testamentary trusts.
At the end of the day, your best option is to avoid intestacy entirely by making a Will so that you get to decide exactly who is responsible for managing your affairs after you die, and how those affairs are to be managed.
At Burke & Associates Lawyers, we provide personalised advice tailored to your needs to help ensure your wishes are followed after you die.
For more information, or to make an appointment with a lawyer from our Wills & Estates Division you can contact our office on +61 3 9822 8588 or please contact our Wills & Estates legal team Meghan Warren, Luke Palmer or Helen Andreou.
Insight by Luke Palmer