The Property (Relationships) Act has made dramatic differences and widened the claimant category for estates, but the basic fact remains that without a will the inheritance you leave your spouse/partner or children may be the inheritance they never wanted.
Despite the very modern flavour of the Property (Relationship) Act, the fact is that if you die without a Will (intestate) the State intervenes. A Court will determine who looks after any dependent children (minors) if a surviving parent is unavailable or unfit and any property will be distributed or held in trusts according to a statutory formula set out in the Administration Act 1969.
Illustrations when a Deceased with No Will Leaves…
- a spouse (defacto partner) and children: Many are under the impression that the surviving spouse (or partner) would take all the deceased’s property, especially if the children are minors. This is not so. The spouse (or partner) is entitled to personal chattels with some exceptions, and a prescribed or statutory amount of 121500 plus interest from the residue of the estate. The reminder is the divided one third to the spouse or partner and two third to the children.
- a spouse (defacto partner), no children, but one or both parents: Here again it is often thought that the spouse or partner would take all the deceased’s property. The spouse or partner takes the personal chattels – again with some exceptions – and from the residue of the estate a prescribed or statutory amount plus interest goes to the spouse or partner. Any reminder is divided two-thirds to the spouse or partner and one-third to the parents or, if only one parent, to that parent.
- a spouse (or defacto partner) only: Generally the entire estate is taken by the survivor.
- children only: The estate is held on trust for the children.
- one or both parent only: The estate is held in trust in equal shares for the parents, but if there is only one parent, for that parent.
- no one: In this situation the Crown takes the estate. It is possible that any dependents (family or not) and anyone else whom the intestate might have been expected to make provision for, may be given a share of the estate.
These examples are very general and are by no means exhaustive. There are qualifications and restrictions, particularly in relation to defacto partners. Creditors may also have also rights. Unravelling an intestate estate can be extremely complicated.
If you think the above is complicated then you need to consider how the new Property (Relationships) Act will impact on existing Wills and intestacies. The new law gives the surviving spouse the right to apply for a division of the relationship property under the Act or to inherit under the will.
If you do not have a Will – make one! If you do have a Will, it may need updating in line with the Property (Relationships) Act. We will guide you through the Will making process in conjunction with general estate planning advice to ensure there is no unnecessary intrusion by the State into your affairs after death. A comparatively small investment now can significantly reduce costs and hassle in the future.
DISCLAIMER: All information in this newsletter is to the best of the authors’ knowledge true and accurate. No liability is assumed by the authors, or publishers, for any losses suffered by any person relying directly or indirectly upon this newsletter. It is recommended that clients should consult a senior representative of the firm before acting upon this information.