Where There’s A Will…
Writing a will is something we may not want to think about it, or dont consider to be a pressing need right now.
Many of us make assumptions about what will happen to our estate when we die, even if we havent put our intentions on paper.
From early next year, new laws will have a significant impact on the way a deceased persons estate is distributed if they have not written a will.
In legal speak, a person who dies without having written a will is known as an intestate. Under current intestacy law, the immediate family receives the estate. The spouse receives the whole estate if it is not valued at more than $200,000. If it is, then the remaining estate is shared equally between the spouse and intestates children.
If there is no surviving spouse or children, there is a set order for ranking the relatives. If there are none, the property goes to the State. The State may then distribute the estate to dependents that would reasonably have been provided for in a will.
That seems fairly clear cut.
Under the new law, there is a presumption that children of the intestate and spouse will inherit later on, when the spouse dies. So the spouse receives everything.
If the intestate has children from a prior relationship, those children are included in the distribution of the estate. In that situation, the spouse is entitled to a new statutory legacy of $350,000, plus personal effects, plus half of the remaining estate. The other half goes to the intestates children from the prior relationship.
The provision for multiple spouses has added a new level of complexity. The definition of spouse now includes a person who has lived with the intestate for at least two years. In the case where there is more than one spouse (eg. the deceased was married but also had a domestic partner) the estate must be shared between them.
While the spouse stands to benefit from these changes, the new laws also present a murky and potentially costly process for determining the split between multiple spouses.
Another important change concerns what happens if there are no relatives. Under the new law, NSW will receive the intestates entire estate. However, the State will be able to waive their rights and distribute the estate accordingly if there are valid claimants, which has been expanded to include charities the intestate was involved with.
The important message is this; if you intend your estate to be distributed in a certain way, write a will. The new laws might aim to distribute your estate fairly, but not everyone in your family may see it that way.