The interesting thing about a Will is that it is one of the few things in life that people will put time and effort into knowing that they will never see it operate. Many people realise this fact and elect to leave no Will, uttering the commonly heard phrase “they can all do what they want, I’ll be dead anyway”. This results in the all too common predicament known as Intestacy – where a person dies leaving no Will and it falls on those left behind, the Court and/or the State to figure out what to do about the remaining estate.

Intestacy

There are many different reasons why people do not make a Will.

Some people have not even begun to think about death as a possibility, while many others choose not to think about death at all. Many have every intention of making a Will but have not got around to it yet, while some simply could not be bothered. And there are those who really do not care what happens when they pass. Whatever the reason, Intestacy can cause many issues for those left behind, and it would be interesting to know whether, had the deceased conceived the issues that would follow their death, they would have taken the time to execute a Will.

The Will

Put simply, the primary functions of a Will are to distribute the estate of the deceased amongst those listed as Beneficiaries, and to appoint the role of Executor to carry out the provisions in the Will. The Executor will also take charge of the estate, especially in relation to management of estate assets and creditors of the estate. It then follows that where no Will is left behind, there is no direction from the deceased to say how their estate should be distributed, nor who should be responsible for the estate until this occurs. In an attempt fill this void in New South Wales, the State has made laws to take the place of the Will, which are then enforced through the Court, namely the Supreme Court of New South Wales.

Beneficiaries

The Succession Act 2006 (NSW) sets out the people who should be entitled to an Intestate estate based on the nature of their relationship with the deceased. The relationship of highest priority in the Succession Act is that of a spouse, which is defined as the person married to, or in a domestic partnership with, the deceased. A sole surviving spouse should receive the whole of the deceased’s Intestate estate, but for one exception – surviving descendants (referred to as ‘issue’ in the Act) of the deceased who are not also the issue of the spouse. In this circumstance, the spouse will be entitled to a statutory amount of money from the estate, plus half of the remaining estate. The remaining half of the estate will then be split equally amongst the surviving children of the deceased, however if any children of the deceased had died leaving issue, the issue would take the share that the deceased ‘child’ would have been entitled to. The spouse will also have other special entitlements set out in the Succession Act.

It is not practical to go into detail about all of the different Intestate scenarios that may occur, however as a general rule, the preference of kin is in the following order – spouses, children, issue, parents, siblings, grandparents, aunts/uncles, issue of aunts/uncles issue and then, if no other kin or appropriate person can be found, the State.

On learning the above, someone who has a spouse (and no issue not of their spouse) and who wishes to leave everything to their spouse may assume that they do not need a Will. Apart from the fact that this could arguably leave the surviving spouse more vulnerable to claims on the estate, having no Will can also cause practical difficulties for the spouse which a simple Will would have avoided. With no Will, a surviving spouse would at the very least need to prove their relationship with the deceased to the Court, satisfy the Court that they have searched for a Will and satisfy the Court that no one of a higher preference is alive.

Say the parties had married overseas in a jurisdiction where no marriage certificates were issued, or the parties were not married but in a de facto relationship; despite the Spouse’s entitlements, they would now have to embark on a process to prove their claim, at probably the most stressful time in their life. While this delay is ongoing, there may be a number of issues in the estate that need addressing, pressing business issues or imminent creditor action. It is clear that even in very simple family circumstances, leaving no Will can create many issues.

In less simple family circumstances, the lack of a Will may encourage interference from other parties who desire some distribution from the estate.

Executor

While the process of determining the beneficiaries entitled to the Intestate estate is quite straight forward in the legislation, the process of determining the Administrator (referred to as the Executor or Trustee in the Will) can be much more problematic. As a general rule, the best positioned person to apply to be Administrator is the person or persons entitled to the estate. By way of example, if a surviving spouse under the laws of intestacy was to receive the whole of the estate, such spouse should have no problem being appointed as Administrator, provided they satisfied the Court of their position.

However, it is far too common for more than one person to be entitled to the estate, say a surviving spouse and the children of a different relationship, or even where there is no spouse, a number of surviving children. In these circumstances the choice of the Administrator is less apparent as each opposing party may be adamantly asserting their claim.

In such circumstances where the parties cannot agree, and without a Will to guide the Court, the Court will need to hear the claims of all entitled parties and reach a decision. The office of the New South Wales Trustee and Guardian (NSW TAG) is often called upon to be the Administrator where a conflict arises, unless the parties can agree to a ‘neutral’ party. Not only is the estate then Administered by someone who often never met the deceased and has no idea about the deceased’s wishes, but this generally also leads to the estate bearing much higher costs.

NSW TAG charge fees for the execution of their roles, as may the neutral party appointed by the beneficiaries. Added to this, the parties may still be in dispute which will lead to legal costs on each of their sides, and potentially for the estate as the Administrator are often times inevitably be drawn into the dispute.

Caveat

Now it should not be inferred from the above that a Will has the ability to absolutely prevent any dispute from occurring in relation to the Estate as certain people will always be entitled to make a claim. However, it is also true that leaving no Will creates a vacuum which is often filled by opposing parties claiming to represent the deceased’s intentions, all the while whittling the estate’s assets down in protracted legal proceedings. It may have been that with the guidance of a Will the dispute would have been avoided in its entirety.

Either way, a Will that is validly and properly constructed will greatly assist in carrying out the wishes of the deceased, whether it be by minimising the task of those left behind in proving their case to the Court, or even thwarting or at least mitigating the claim of one who may have had strong entitlements under the law which contrast the (properly determined) wishes of the deceased.

Or Lawyers may assist you in the preparation and execution of a Will and other testamentary documents, and also advise you on decisions that you can make while you are alive that may have an impact on potential claims on your estate.

If you have any questions please do not hesitate to contact a member of our team.

Chris Lee

Lexington Law