No will? Don’t expect your assets to go where you want

September 1, 2022

In our last bulletin we talked about the impact of intestacy (dying without a will) when you may have property in multiple states or territories in Australia or it’s unclear what your “home” state is.

This week we look at some of the unexpected, and possibly unwanted, ways your assets may be distributed if you die without a will.

If you haven’t made a will then on your death the intestacy rules will apply. These are the rules set by each state government to work out how assets are distributed.

If you don’t have a current will, think about how these rules may play out in your personal situation.

1. If you have not finalised your divorce from your ex-spouse but have entered into a de facto relationship, then you will die with two spouses. Each spouse will be entitled to a share of your estate under the intestacy rules.
2. If you have a blended family (children from a previous relationship), the intestacy rules are very unlikely to make appropriate and adequate provision for all of your intended beneficiaries and almost certainly not in the way you would want.
3. Your surviving spouse may not automatically be given the home that the two of you share.
4. Step-children will not receive a share of your estate under the intestacy rules.
5. If you have children under 18, your wishes as to who will be their guardians are unknown. A lack of clarity on guardianship is a very common cause of family member disputes arising from an intestacy.
6. Your children will take control of the assets they have inherited from you on their 18^th birthday. This occurs whether or not they are responsible enough to manage these assets.
7. If you have children under 18, their assets will be held on trust for them by whoever is appointed as the administrator of your estate. This may not be the person you would choose to safeguard your children’s inheritance.
8. The intestacy rules relating to how assets are divided up may result in a forced sale of an asset. This may result in a sale that is poorly timed or that attracts a substantial capital gains tax bill that you might otherwise have wished to gift to a single beneficiary.
9. There is an increased risk of family provision claims (claims by people who think you should have provided for them in your will) against your estate, as the share of your estate individual beneficiaries may receive might be considered unfair or unworkable. This is particularly the case when your assets are less “liquid”, such as a large single real estate or other holdings.

For more information about administering a deceased estate that is intestate or making a will, reviewing or updating your will, please contact a member of our Estate Administration team at Fox and Thomas.