Intestacy in Victoria
What is it?
When you die without a will, you die without any formal arrangement for the disposal of all your property and assets (your ‘estate'). Death without a will is called ‘intestacy', and the law has established its own arrangements for disposing of your estate.
Dying intestate means that you have left your friends and loved ones with no indication of your intentions or preferences about who-gets-what. Bereavement is always an incredibly difficult time, so this situation will often cause unnecessary strain and will inevitably leave questions, in the minds of those who are left, about what your intentions were. The pain will be exacerbated in the event of a particularly tragic death, so no matter how young or old you are, it is always better to leave a will.
However, the law does attempt to provide an orderly process for the disposal of your property and assets after death. In Victoria, the relevant statute is the Administration and Probate Act 1958 .
The Administration and Probate Act 1958 provides a procedure to be followed when there is no will and a list of people who are entitled to receive a share of your estate. This provides some security and structure to what would otherwise be an extremely awkward, chaotic and potentially bitter process.
Administering the Estate
Before that, however, the Supreme Court will make a Grant of Administration and appoint an Administrator to dispose of the deceased estate. The Administrator will then administer the estate. This includes making a list of every single thing the deceased owned from real estate and bank accounts right through to the furniture and the last book. The Administrator must then do everything in his or her power to preserve the condition of these things – including maintaining all investments to the best advantage of the beneficiaries – until the moment when everything will be distributed according to the list of beneficiaries provided by the law.
Clearly, it is major responsibility and not appropriate for just anyone to undertake. Again, it is far preferable to consider the matter and make a will which appoints someone of your choice who enjoys your trust.
Furthermore, an Administrator appointed by the Court is more vulnerable than someone you have chosen. The appointment can be easily disputed by bereaved relatives who may think that the appointee is clearly not capable or does not have their interests at heart. Precisely because of the possibility that the Court may inadvertently appoint someone who, indeed, is incompetent or has no consideration of what is in everyone's best interests, an expensive insurance bond may have to paid against the possibility that the Administrator may maladminister or defraud the estate.
Distributing the property and assets
The Administrator must then distribute the property and assets according the list prescribed by the Administration and Probate Act 1958 .
This Act lists all those to whom your estate will be distributed (the ‘beneficiaries') and in what order, including spouses and former spouses, children, parents, grandparents, brothers and sisters and so on.
A basic summary of the list is as follows:
1) the surviving spouse or domestic partner (of either sex) - if there are no children, that person inherits everything;
2) surviving children, regardless of whether or not they are born outside an existing marriage, and all children will inherit equally;
3) if there are no spouses, domestic partners or children, to any living next of kin (this may require searching for next of kin);
4) if there are no surviving spouses, domestic partners, or children, then the Government will inherit the entire estate.
There are various permutations of this list – for example, if the deceased is survived by both a spouse and a domestic partner – but the general intention of the law is clear.
This list might generally reflect the wishes of some people. However, a customised will that clearly expresses your wishes and, therefore, reflects your own life and relationships will always be best, whereas the Act's version of who-gets-what may be unsatisfactory - and unfair. Your life is unique, whereas the distribution list prescribed by the Administration and Probate Act 1958 is general. The law's distribution list cannot ensure the personal touches you would prefer, which may end up being ignored. Only you truly know your family situation, the friends you most value, and who will best appreciate your possessions and assets when you are gone.
Clearly, the Act automatically favours family over everyone else. Even among your family members, the needs of some may be greater than others and your desire to help the most needy first - regardless of whether they are your spouse, child, sibling, or whoever - may be completely disregarded. For example, if there is no will you will not be able to provide for any special needs one child may have because all children inherit equally. Equally, you may feel there are family members who are not entitled to a share of your estate and this could be ignored if you don't have a will. There may be people who are not relatives but who you feel are entitled to a share of your estate before some family members; if you don't make a will, this won't happen.
Harmony among those you leave behind is better than questions and bitterness. If you leave it to the law to administer your estate, the way it divides your assets among your friends and family may defy your own wishes and create bad feeling among those you love. It is just as important as your own wishes that your friends and family know of them. Also, if you are in a de facto or same sex relationship, it is in your partner's interests that you write a valid will. While the law recognises the rights of ‘domestic partners' – and this is regardless of gender – it has stringent tests to establish that such a relationship did, indeed, exist. Going through this could prove to be an unnecessarily humiliating and frustrating experience.
Avoiding intestacy
Clearly, it is preferable to take the time to write a will or to update it if you already have one. When you do so, it is important that your will follows strict legal requirements, otherwise it will not be a valid will, and intestacy will still occur. A solicitor trained in probate law can provide that these vital requirements are met and that your will is safely stored.