What Happens If Someone Dies Without a Will?
When a person dies in Victoria without leaving a valid Will, the estate of the deceased person is distributed according to the provisions of Part IA – Intestacy of the Administration and Probate Act 1958 (Act) “The Act”.
Intestacy is the term which refers to position where a person dies without a valid Will (a full intestacy), or leaves a valid Will which disposes of some, but not all of the deceased’s estate (a partial intestacy).
Being intestate means that the laws of the state or territory they live in will decide how their estate is administered. If you die without a Will or your Will is not valid, then an application for a Grant of Letters of Administration will need to be made to the Supreme Court. Usually, it is the deceased’s next of kin who has to apply for this grant. For example, the spouse, domestic partner or a child of the deceased.
Defining Your ‘Estate’
In simple terms a person’s estate is their net worth at any point in time. It is the sum of all of their assets, less any debts or liabilities at that time. A person’s assets are their property and belongings that have value, such as a house, car, personal items (e.g., jewellery, art, heirlooms and antiques etc.) and bank accounts. A person’s liabilities consist of any money they may owe, such as a mortgage or a loan.
i) Life insurance and superannuation
The proceeds from a person’s life insurance and superannuation do not automatically form part of their estate. If you are unsure of how your life insurance and superannuation benefits will be dealt with, you should speak to your superannuation/life insurance policy providers and consult your financial advisor and estate planning lawyer.
What Do You Do If Someone Dies Without a Will?
The first step is to apply for permission to administer the estate. The estate includes all the person’s assets and liabilities. The court will then issue a grant of letters of administration. Letters of administration gives a person or trustee company (such as State Trustees) the legal right to administer the estate of the person who has died.
The closest next of kin can apply to be the administrator, or they can ask a solicitor or trustee company to apply for them.
The person who administers the estate is called an administrator rather than an executor, but their duties are mostly the same.
How Do You Apply for Letters of Administration?
There are a series of steps you need to go through to apply – including advertising online that you are applying. When you submit your application to the Probate Office, you need to include the deceased person’s death certificate, a confirmation of the estate’s assets and liabilities and proof that you are the closest next of kin.
If the next of kin is a domestic partner, the Registrar of Probate at the Supreme Court will need to see proof of the relationship. You will need to include an affidavit or another legal document, proving that the relationship existed.
i) What does an administrator do?
Some of the other tasks an administrator needs to do include:
- Finding and contacting the beneficiaries (people who will be given something from the person’s estate), including anyone interstate or overseas. This may include genealogy searches to work out what sort of beneficiary they are under Victoria’s intestacy laws;
- Protecting the person’s assets. You need to make sure the assets are safe. This might include taking out insurance and securing the assets;
- Providing death notifications to the Australian Tax Office, Centrelink and banks;
- Paying any outstanding bills and debts from the estate funds and arranging to have assets valued;
- Resolving disputes between beneficiaries;
- Lodging tax returns if needed;
- Claiming life insurance and superannuation;
- Dealing with any real estate that is part of the estate, including getting the property ready for sale;
- Distributing assets according to Victoria’s intestacy law.
How Is Inheritance Priority Worked Out When There Is No Will?
An intestate person’s estate is distributed among that individual’s family members, according to a hierarchy laid out in the law. This process involves applying to the Supreme Court of Victoria for a Grant of Letters of Administration. In the rare case that a person dies with no will and no living family members or relatives who can be traced, then the deceased estate becomes property of the state government of Victoria.
Challenging An Estate with No Will
You are entitled to challenge the estate of someone who has died intestate, provided you are an eligible person under the Act.
This includes spouses, children and certain dependants. Arguably, claimants are more likely to succeed with a family provision claim in these cases due to the fact the deceased left no testamentary intentions and intestacy rules often disinherit legitimate beneficiaries.
Nevertheless, claimants will still be expected to present a convincing case to the court as to why they should receive additional provisions from the estate.
A judge takes into account various factors when ruling on a family provision claim, including the claimant’s relationship with the deceased, the claimant’s present and future financial needs, and any prior dependency on the testator.
Why Intestacy Should be Avoided
Intestacy is something that should be avoided for other reasons, too, including:
- You have no control over who benefits from your estate and the proportions in which they benefit (therefore, your preferred beneficiaries may miss out or receive less than you would have liked them to);
- You have no control over who administers your estate;
- There is no protection nor tax effectiveness built into the distribution which may leave beneficiaries vulnerable;
- You do not nominate the guardian for your children;
- The cost of administering your estate may be more expensive;
- There may be a dispute as to whom is the “next of kin”.
Chiara Nicolaci – Solicitor– Matthies Lawyers
Thus should you have any queries in regard to probate applications and estate planning matters, please contact Matthies Lawyers for an obligation-free consultation or call +61 3 8692 2517 today.
Disclaimer: This article contains general information only and is not intended to be a substitute for obtaining legal advice.