Navigating the Laws of Intestacy: How this applies to you
What is intestacy?
In Victoria, if someone passes without a valid Will, that means they have passed intestate. This ultimately causes their estate to be administered or dealt with according to the laws of intestacy which are set out in the Administration and Probate Act 1958 (Vic). In contrast, if someone passes with a valid Will, their estate will be dealt with pursuant to their wishes as set out in their Will.
Intestacy laws may come into effect in the following scenarios:
· The deceased passed without a Will;
· The deceased passed with a Will but did not have mental capacity at the time their Will was executed;
· The deceased passed with an invalid Will because it was not signed and witnessed accordingly;
· The deceased married but their Will was not made in contemplation of marriage;
· The deceased’s Will fails to adequately deal with all of their assets.
How are intestacy laws applied?
On 1 November 2017, the Administration and Probate and Other Acts Amendment (Succession and Related Matters) Act 2017 significantly changed the laws of intestacy in Victoria making greater provisions for spouses.
Most notably, if the deceased passes with one partner and no children or one partner and children of that relationship, then the surviving partner will inherit the whole of the estate. Prior to the changes in 2017, intestacy laws provided for the surviving partner to receive the first $100,000.00 and 1/3 of the balance with the remaining 2/3 of the estate being distributed amongst the children.
Why intestacy should be avoided
Some reasons why intestacy should be avoided include;
· It can lead to family disputes and relationship breakdowns.
· You have no control over who administers your estate.
· The costs associated with administering your estate may be more expensive.
· You have no control over who benefits from your estate.
A spouse is defined as a person who was married to the deceased at the time of the deceased’s death. A marriage can only be ended by divorce. Consequently, a person retains the title of spouse despite estrangement and irrespective of how long the separation has lasted.
What this effectively means is, if a deceased has been separated from their partner for 10 years and they die without a valid Will, their partner Will inherit the entirety of the estate as their marital bonds were never permanently severed by way of divorce.
There are avenues to contest this under the Administration and Probate Act 1958 pursuant to section 90A whereby an eligible person can make an application for a “family provision order” for their proper maintenance and support. The fact of the estrangement may serve to weaken any defence against a family provision claim if the estranged spouse is to receive the estate. Our firm has dealt with these scenarios and successfully argued this clause.
Where to now?
The disadvantages of having your estate dealt with via intestacy laws are best circumvented by having a properly constructed Will that unambiguously expresses how you wish for your estate to be distributed.
If you do not have a Will in place, we encourage you to get in touch with our office so that we may assist you with achieving peace of mind and avoiding the uncertainty of intestacy.
It is also imperative to update an existing Will if your circumstances change, such as if you get married or divorced.
Our team can be contact by phone on 03 9117 6189 or email firstname.lastname@example.org