April 15, 2019

Wills and Estates

Many Australians still die each year without a valid will.

If you do not have a valid will the law decides who will manage your estate when you die and who will take your estate assets (and it may be people you do not wish to benefit!).

It is a common misconception that if you die without a will the government will automatically take and manage your estate assets, but this is not the case.

WHO WILL TAKE YOUR ASSETS IF YOU HAVE NO WILL?

If you die without a will (or a will that does not give away all your estate assets) you are said to have died ‘intestate’ (or partially intestate) and the law decides how your estate assets will be divided. Generally, the order of who will take your estate assets on intestacy in Queensland is:

Your family situation

Who will take your assets

Spouse/s and no children

Your spouse/s

Spouse/s and children

Your spouse/s and children (and potentially grandchildren)

No spouse but children

Your children (and potentially grandchildren)

No spouse, children and grandchildren

Your parents (equally or the survivor of them)

No spouse, children, grandchildren and parents

The list goes on through next-of-kin (siblings, nephews, nieces, grandparents, aunts, uncles and cousins)

Only if you have no spouse, children, grandchildren, parents and next-of-kin will the government take your assets

Within each family situation set out above the law sets out a formula for the entitlement of each beneficiary and this may not reflect your wishes. For example, if you want your spouse to take all your estate assets but you have children who also survive you then your spouse is not entitled to all of your estate assets. 

The only way to avoid the legal formula applying is to make a will. Even a basic will allows you to name your first choice beneficiaries and reserve beneficiaries.

WHO WILL MANAGE YOUR ESTATE IF YOU HAVE NO WILL?

If you die without a will the law determines who can manage your estate and distribute it in accordance with the intestacy rules, as outlined above. This person is called an administrator.

In Queensland, the current order of priority is:

Order of priority 

  1. Your spouse
     
  2. Your children
     
  3. Your grandchildren (or great-grandchildren)
     
  4. Your parents
     
  5. Your brothers and sisters
     
  6. The children of your brothers and sisters
     
  7. Your grandparents
     
  8. Your uncles and aunts
     
  9. Your first cousins
     
  10. Anyone else the court may appoint

Any person within the class of persons entitled to manage your estate can apply to the court to act as your administrator to deal with your estate in accordance with the intestacy rules. If the person does not have priority then it is necessary to first ‘clear off’ the persons in a higher class. If you are ever in the situation where you wish to act as administrator of an estate and need to ‘clear off’ persons in a higher class you should seek legal advice and we can assist you.

It is important to understand that the court could also appoint someone else to manage your estate which may not be in the list or in the order contained in the above list. To avoid this order of priority applying to your estate once you die you can make a will which appoints an executor and a reserve executor (the person who manages your estate after you die where appointed by will).

TO AVOID UNINTENDED OUTCOMES ACT NOW

The intestacy rules can lead to unintended outcomes. Having a will lets you choose who will manage your estate and who will take your estate assets after you die.

Whether your affairs are simple or complex, or you think your assets are minimal or extensive, making at least a will could make the administration of your estate more straightforward and cost-efficient. Often getting your affairs in order is more than just making a will but it is a good start. Click here for further information. 

If you want to make a will, review your will or someone you know has died without a valid will and you need to sort out their affairs, the McInnes Wilson Wills & Estates Team can help you.