Do you have a valid Will? Do you know what would happen to your assets if you died without a Will tomorrow?
Dying without a Will is known as dying ‘intestate’. Where this occurs, the law (not you or your family) determines who is entitled to your assets, based on their relationship with you.
As of 1 November 2017 the Administration and Probate and Other Acts Amendment (Succession and Related Matters) Act 2017 (VIC) commences, significantly altering the distribution of intestate estates.
The most significant changes brought about by the new laws are:
Where the deceased is survived by a spouse and a child or children of that relationship, the spouse will be entitled to the entire estate;
- Where the deceased is survived by a spouse and a child or children of the deceased who are not the children of the surviving spouse (ie. children of a previous relationship), the spouse will receive the first $451,909.00 (indexed annually to CPI) plus one half of the balance of the estate, and the children will receive the other half of the balance of the estate equally;
- The term ‘partner’ has been broadened to include a married spouse, domestic partner and a registered caring partner;
- The sole partner of the deceased can elect to acquire the real property of the estate at its market value at the date of death (as part of their entitlement in the estate);
- Where it is determined that the deceased had multiple partners (i.e. separated but not divorced from first spouse, with new de facto partner), then the estate is divided equally between the partners. This distribution is further complicated if there are children of either or both relationships; and
- If the deceased dies without a partner or children, there is a pattern of next of kin entitled to inherit on intestacy, commencing with parents then siblings etc, which is now limited to the first cousins of the deceased. Where a deceased does not have any first cousins, the State will take.
Whilst the Act provides a much-needed modernisation of the intestacy provisions, these remain inadequate for most individuals and families as they cannot deal with the intricacies and complexities of modern family and financial situations, asset structures and most importantly, do not take into account your individual wishes. A Will remains the better alternative!
Further, being new laws they have not been tested by the Courts and therefore we cannot predict how they may be interpreted.
If you already have a Will, it should be reviewed frequently to ensure that your estate plan is current and tailored to your individual wishes, personal and financial circumstances and asset structures, particularly if any of those matters have changed in the interim.
To discuss your wills, powers of attorney and estate planning needs, or for advice regarding a deceased estate, please contact Russell Kennedy.
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