There is no valid Will: what happens now?

When a loved one passes away, there are many things to organise, including the administration and distribution of their assets in accordance with their Will.  However, sometimes there is no valid Will; this may be because the deceased did not make a Will (either by choice or because they were mentally incapable of doing so), the Will does not meet the validity requirements set out in the Wills Act 1968 (ACT), the Will has been revoked, or because the deceased failed to update their Will as circumstances in their life changed such that that the gifts contained therein have lapsed or fail.  When this happens, the deceased is known as intestate, and rather than their estate being distributed in accordance with their wishes, it will be distributed in accordance with the intestacy laws set out in the Administration and Probate Act 1929 (ACT). 

The Administration and Probate Act 1929 (ACT) provides for a intestate estate to be distributed in the following manner and priority: 

1. In the event the deceased is survived only by a spouse (husband, wife, de facto partner), then the spouse will receive the entirety of the deceased’s estate;

2. If the deceased is survived by a spouse and children, then the spouse will receive the first $200,000 (or as much thereof) of the deceased’s estate plus interest at 8% and thereafter share the balance with the deceased’s children - the exact division of the balance of the estate will depend upon the number of children that survive the deceased;

3. If the deceased has no spouse, but is survived by children, then the children equally share in the deceased’s estate; 

4. If the deceased has no spouse, or children, then the estate will be paid to the following categories of people:

   1. Parents of the deceased; 

   2. Brothers and sisters of the deceased; 

   3. Grandparents of the deceased; 

   4. Aunts and uncles of the deceased; and 

   5. In the event there is no person from the above mentioned categories who survives the deceased, then the Australian Capital Territory Government will be entitled to the deceased’s estate. 

Further to the above, if the deceased’s estate comprises of a house, which the spouse of the deceased was residing in at the time of the deceased’s death, then it is possible for the spouse to elect to have the house transferred to them in or towards satisfaction of their interest in the deceased’s estate.

Distribution of an estate in accordance with the laws of intestacy may not achieve the testamentary intentions of the deceased.  For example, if it’s important that friends or charities receive a portion of a person’s estate, such is not possible following the laws of intestacy; this can only be achieved by preparing a valid Will. It is therefore important that individuals prepare a Will and review it every 2-3 years to ensure that it fulfils their intentions. 

If a person does die intestate, it will still be necessary to apply to the ACT Supreme Court for Letters of Administration; this grant will enable the administrator (who applies for and is appointed under the grant) to administer and distribute the estate. 

If you are navigating an intestate estate, or simply want to ensure your estate is distributed in a specific manner, you should obtain specialist legal advice. 

Contact Robinson + McGuinness to arrange an appointment on (02) 6225 7040, by email on info@rmfamilylaw.com.au or get started now online with one of our experienced lawyers.

Author: Peta Sutton

What Happens to Your Superannuation When You Die?

Superannuation is considered separate to your estate, which means special arrangements need to be made if you want to decide where your super will be paid. 

You can nominate beneficiaries for your super by a completing a death benefit nomination, which can be binding or non-binding. Binding death benefit nominations are written directions to a superannuation trustee which set out how you wish for your super to be distributed. If you have a valid nomination at the time of your death, the trustee is bound to follow it. Non-binding death benefit nominations are a written guide as to how you would like your super to be distributed, however the nomination is not binding on the trustee, who has ultimate discretion as to how to distribute your super.

Completing a binding death benefit nomination gives you greater certainty as to how your super will be distributed in the event of your death. If you don’t have a valid nomination in place, the trustee will need to make a decision as to how your super will be distributed, which generally involves investigating your relationships at the time of your death. Each super fund is different, and the decision will need to be made in accordance with the rules of the fund, as well as superannuation law. This can be a lengthy process, so having a valid nomination in place can also reduce delay in making payment to beneficiaries.

Who can I leave my superannuation to?

The Superannuation Industry (Supervision) Act (“SIS Act”) provides that death benefit nominations can only be made to your legal personal representative or a dependant. Dependants include children, spouses and people you have an interdependency relationship with (e.g. close personal relationships where you live together and one or each of you provide the other with financial and domestic support). A number of factors are taken into account when determining whether an interdependency relationship exists.

Parents and siblings generally do not satisfy the requirements of the SIS Act, meaning if you want your parents or siblings to receive your super, you should nominate your legal personal representative as your beneficiary to ensure your super benefit is paid into your estate. The funds can then be distributed in accordance with the terms of your will. 

Death benefit nominations generally lapse after a period of three years, so you should make sure you review your nomination if necessary. Some super funds offer non-lapsing death benefit nominations which do not lapse until you update or cancel the nomination.

It is recommended to review your estate planning arrangements every few years to ensure they still reflect your wishes. You should also consider reviewing your estate planning if there has been a change in your personal circumstances or financial situation. We offer fixed fees to review your estate planning arrangements and can assist you with preparing Wills, Powers of Attorney, and binding death benefit nominations. If you would like to discuss your circumstances and how we can assist you, please contact us today on (02) 6225 7040 by email info@rmfamilylaw.com.au or get started now online.

Author: Amy Davis