Major Change to the Laws of Intestacy
New Provisions as to the distribution of the assets of a deceased person dying without a Will become operative as from 1 November 2017
Intestacy
Means a person has died without a valid Will (or can also apply to part of an Estate if the Will does not properly distribute all of the assets of the deceased person). In such circumstances the deceased’s assets will be distributed according to legislation.
Intestacy ought be avoided by ensuring that a valid Will is made so that a deceased’s assets will be distributed in accordance with their wishes.
New legislative provisions
In Victoria the relevant legislation is the Administration and Probate Act.
It now improves the position of a spouse or domestic partner than would have been the position prior to 1 November 2017. The change has been made as often in the previous legislation a surviving spouse or partner might not have received appropriate benefit or support and might have been required to “challenge” the intestacy provisions. In some cases it meant that the surviving partner or spouse had to sell the family home to enable a distribution to be made in accordance with the law where children also survived the deceased.
Under the previous legislation where a person died without a Will leaving a spouse or domestic partner, and children, then the surviving spouse or partner and children would share the Estate in the following manner:
The spouse or partner would receive the deceased’s personal chattels.
The spouse or partner would receive the first $100,000.00 of the Estate.
The balance of the Estate would be shared as to one third for the spouse or partner and the remaining two thirds equally between the surviving children.
In the same scenario following the new legislation, the surviving spouse or partner will receive the whole of the Estate and the children not receive anything.
In a different scenario under the new legislation however if the deceased is survived by a domestic partner and his or her children are not children of the surviving partner then the surviving partner will receive the personal chattels and a statutory legacy (indexed) of $451,909.00 plus 50% of the balance of the Estate and the deceased’s children would receive the remaining 50% of the residuary Estate.
The new legislation also covers the situation where a deceased person dies without a spouse or partner and without children and a hierarchy of entitlement then arises depending of the closeness of the relationship and now ceases with cousins as the last entitled and more remote descendants no longer benefit.
As indicated earlier, to avoid all of the issues that arise in an intestate Estate a prudent person ought always ensure that a valid Will is made.
Author: Peter Wilson
Published: 1 December 2017