Intestacy – No valid Will
If there is no Will or a Will is found to be deficient then your loved ones – usually your spouse or children may need to apply for Letters of Administration. This process involves an application to the Supreme Court and often occasions significant delay and much greater expense than if you had a Will.
An administrator will need to be appointed to act and this can be expensive for instance if your family chose to appoint the NSW Trustee and Guardian to act as administrator they will charge a set commission at the following rates:
- 4% of the gross value of an estate up to $100,000
- 3% on the next $100,000
- 2% on the next $100,000
- 1% on the next $100,000 (GST is added to all these commissions)
In addition to its commision, the NSW Trustee and Guardian may charge fees for such things as preparing tax returns and disputed claims are extra. Consider what this means if you own the average Sydney home when an estate comprising assets of only $500,000.00 attracts a fee of $11,000.00 plus GST – for a modest Estate with no disputed issues. The administrator’s duties involve identifying and collecting assets and distributing them after paying any debts and taxes in accordance with the law.
The administrator must establish the family tree using certificate evidence which may be an expensive and time-consuming task depending on who is the next of kin and their whereabouts.
If you die Intestate, how will your Estate be divided up?
In NSW, the Succession Act applies and your assets will be distributed according to a pre-determined formula with certain family members receiving a defined percentage of your assets. To give you an idea about how the Act works, we set out below, some (not all) information concerning distribution:
- If a person dies leaving a spouse or spouses and no issue – the spouse or spouses inherit the whole intestate Estate. This would potentially include situations where for instance, you had separated but not divorced your spouse and you had entered into another domestic relationship.
- If a person dies intestate leaving a spouse or spouses as well as an issue of the one or more spouse/s then the spouse/s inherit the whole intestate Estate.
- Spouse/s an issue of another relationship – if there are children of another relationship other than the spouse/s (remember spouse/s includes domestic partner/s) – e.g. issue of an ex-spouse or ex-domestic partner – the Estate is divided according to a formula between the spouse/s and issue (this may also include children of the intestate and current spouse/s as well as children of the ex-spouse or ex-domestic partner) as follows:
The spouse receives or spouses share between them:
- $350,000 as adjusted by the Consumer Price Index in accordance with a formula set out in the intestacy laws – under the previous intestacy laws the legacy was $200,000 and only one spouse or one de facto spouse was entitled;
- The intestate’s personal effects;
- One-half of the remainder of the intestate’s estate;
All children including those of the other relationship as well as children of the spouse/s receive the remaining part of the Estate. Where multiple spouses survive the intestate their entitlement is shared – they can reach an agreement between themselves, or submit to an order of the Court, or split the Estate into equal parts. If the intestate person dies without a spouse/s or ‘issue’ then the Estate is allocated to:
- Siblings (and if one or more of the siblings has died then their share will pass to their issue),
- Aunts and uncles,
- First cousins.
There are other provisions that apply and the above information is just part of the regime provided by the Act.
Contact us to find out more or to arrange a consultation.