Attwood Marshall Lawyers Wills & Estates Partner Angela Harry recently joined Robyn Hyland on Radio 4CRB to discuss the heartbreak family members can face when they are mourning the death of a loved one who did not leave behind clear instructions for their estate and funeral wishes in their Will. Dealing with an intestate estate can be extremely complex, costly, and distressing for your family.
Intestate estate vs testate estate: What’s the difference?
When you die with a valid Will in place, you are said to have died testate. When you die without having made a Will, you die intestate.
A testate estate can be distributed by the Will-maker’s chosen executor to the beneficiaries in accordance with the instructions left in the Will. For this to happen, the Will usually has to go through probate which will confirm the validity of the document and who is to be appointed executor. Once probate is granted, the executor can then go ahead and fulfil their duties and honour the deceased’s wishes. The Will guides the process, and it tends to be much simpler and more cost-effective compared to dealing with an intestate estate.
An intestate estate does not automatically allow for anyone to step into the role of executor to manage the estate. For the estate to be administered, an eligible person, which is usually the next of kin, needs to apply for Letters of Administration. The Supreme Court will then appoint the most appropriate person as administrator, and the estate will be distributed in accordance with the rules of intestacy.
Each state and territory have their own set formula as to how an intestate estate will be divided and who can benefit from it. This may not be in line with what the deceased would have intended or hoped for and does not consider a family’s unique circumstances or wishes.
More than half of Australia’s population does not have a Will, leading to situations where individuals pass away without providing crucial instructions for their loved ones. In such cases, the courts are tasked with determining whom to appoint to administer the intestate estate.
Identifying an intestate estate
Before an estate can be declared intestate, all the necessary enquiries must be made to locate a Will.
Unfortunately, there is no central Will register to refer to when trying to locate someone’s Will; it can be a lengthy process of elimination. However, here’s the best place to start:
- Search the deceased’s home, personal items, and paperwork;
- Contact law firms that acted for the deceased or were located close to where the deceased lived to ask if they hold a Will for the deceased;
- Place an advertisement in the Law Society Journal for other solicitors state-wide to see and respond to;
- Contact the Public Trust Office to see if they hold a Will for the deceased;
- Check with banks and financial institutions to see if they hold a safety deposit box or documents held in safe custody for the deceased.
Before applying for Letters of Administration, you must be able to prove that you have made all the necessary enquiries to locate a Will, if it exists, and have failed to find the Will.
Once you have satisfied the court that the estate is intestate, the next step is to identify which state or territory the assets are held in, make an application for Letters of Administration, and once appointed as administrator, distribute the assets in accordance with the relevant laws.
Read more: Can’t find a person’s Will? Start your search here!
Who gets what in an intestate estate?
Each state and territory in Australia have their own provisions to determine how an estate should be divided and who is eligible to receive their share.
The statutory formula may not necessarily be fair in the circumstances depending on the deceased’s family dynamics and the assets they owned. It is not uncommon for family provision claims to be made when beneficiaries believe they should have received further provision from an intestate estate.
In Queensland under the rules of intestacy, an estate will be distributed as follows:
- If the deceased leaves behind a spouse or domestic partner and they had no children, then the entire estate will pass to that spouse or partner.
- If the deceased had a partner and children, then the whole estate will still go to the surviving spouse.
- If the deceased had a partner but there are children of the deceased that were from a previous relationship, then the surviving spouse will receive personal effects, the first $150,000 of the estate, and then the remainder of the estate will be divided equally between the children.
In New South Wales and Victoria:
- If the deceased had a spouse and child from the relationship, then the spouse is entitled to the whole of the estate.
- If the deceased had a spouse, but also had a child, or children, from a previous relationship, then the spouse is entitled to receive the personal effects of the deceased, a statutory legacy of approximately $490,000 in NSW and $451,909 in Victoria, and half of the remainder of the estate. Then, the deceased’s children are entitled to equal shares of the remaining half of the estate. The spouse also has a right to elect to acquire property from the estate.
- If the deceased had more than one spouse, then all spouses will be entitled to equal shares of the estate.
- If the deceased did not have a spouse but had surviving children, then the children would equally divide the estate.
- If the deceased had no spouse and no children, then the deceased’s parents would be entitled to equal shares of the estate.
The legislation further stipulates who may be eligible to benefit from an estate if there are no parents surviving the deceased, including when siblings, nieces, nephews, grandparents, aunts, uncles, and cousins may be entitled to share in the estate.
Who can make funeral and burial arrangements if there is no Will and no executor?
When there is no Will, it is usually the next of kin, such as the deceased’s spouse or children, who can make an application for Letters of Administration and step in to arrange the funeral and burial or cremation.
The courts will generally acknowledge that it is often impractical to wait until a person is appointed as administrator of an estate before funeral arrangements can be made, so unless there is a dispute over such arrangements, the next of kin will be able to begin making these decisions and working with the funeral director.
However, that person cannot start intermeddling in the estate or dealing with any property or assets until they have been granted Letters of Administration.
The problem can arise when there is a dispute over who will make the funeral arrangements, a situation commonly observed among separated parents who are mourning the loss of a child. In cases involving the passing of a young person, especially when the parents are separated, conflicts may emerge regarding the appropriate course of action for their child’s funeral. Often, these disputes are fuelled by differing religious or cultural beliefs; one parent may advocate for burial in accordance with their religious or cultural customs, while the other may prefer cremation.
Legislation typically grants both parents the legal entitlement to act as administrators and make such decisions. However, if there is a disagreement regarding who should have control over the arrangements, the matter may escalate to court for the court to decide.
Read more: Disputes over the dead: What happens when families can’t agree on how to lay someone to rest
Who has the highest priority to apply for Letters of Administration?
When looking at an intestate estate, each state and territory slightly differs in who they identify as having highest priority to be the administrator.
In Queensland, the priority follows this order:
- Spouse
- Children
- Grandchildren or great-grandchildren
- Parent/s
- Siblings
- Nieces or nephews
- Grandparent/s
- Aunts or uncles
- First cousins
If there are no family members from the above categories, then any other person may seek to apply to the court for Letters of Administration.
Click here to see who can apply for a Grant of Administration in NSW.
Click here to see who can apply for a Grand of Administration in VIC.
In many cases, once you move down the line and either children, grandchildren or parents and siblings start getting involved and applying for Letters of Administration, this is often when problems arise about who is the most appropriate person to take on the role.
What happens if several people want to apply for Letters of Administration?
Different rules apply in each state or territory regarding who has priority and is the most appropriate person to apply for Letters of Administration to administer an estate.
This can become complicated depending on how your family dynamics and relationships.
For instance, in Queensland, if a deceased person leaves behind three children, each child has equal standing to apply to the court for letters of administration on intestacy.
In New South Wales, children also have equal priority and can apply individually or jointly. However, if an individual child wants to apply alone, the consent of the other children is required.
Often there are arguments about who is the best person to be granted administration. In such cases, if disagreements persist and parties cannot reach an agreement, the matter may be brought before the court and the court may then determine that appointing an independent administrator is the most appropriate course of action.
What happens if a Will is discovered after Letters of Administration have been granted?
If a Will surfaces after someone has already been appointed as administrator of an intestate estate, it can come as a shock, especially given the extensive investigations that must be undertaken before someone can apply for Letters of Administration. These enquiries are designed to flush out a Will if it exists.
If this happens, it will depend how far the administration process has progressed as to whether the executor under the Will can bring an application to revoke the existing grant and apply for a new grant of probate of the Will.
If the estate remains intact, it will be much easier for the executor to call in the assets. However, if the estate has been administered, and a Will is discovered years later, it will likely be too late.
If a Will is located after Letters of Administration have been granted by a court, the executor named in the Will should be alerted as soon as possible.
The biggest legal challenges when distributing an intestate estate – an example
One scenario seen when administering an intestate estate involves two spouses who have equal standing to inherit under the rules of intestacy. What many people don’t realise is that, legally, you can have two spouses. This often occurs when a couple separates but fail to finalise their divorce. Over time, they may enter a de facto relationship with new partners.
This de facto relationship can continue for years, and if one partner dies, they may legally leave behind two spouses with equal priority to apply for Letters of Administration. Both surviving spouses also share the entitlement to the deceased’s estate under intestacy laws. This situation can lead to an unfair outcome, especially if a former partner from years ago has the same inheritance rights as the current partner, who may have been financially dependent on the deceased at the time of their death.
Navigating the complexities of intestate estate distribution underscores the importance of getting your Will done by an experienced estate planning lawyer, and ensuring your documents are kept up to date when your family circumstances change, including entering a new relationship.
This is also a stark reminder about the importance of finalising your divorce when eligible to do so and updating your Will and Enduring Power of Attorney immediately following separation. What may seem like mere paperwork and an additional expense at a time you are already dealing with other family law matters such as parenting disputes or a property settlement, can have long-lasting consequences that could cause additional heartache for your future spouse and your family if you were to suddenly pass away.
Attwood Marshall Lawyers – helping you plan for the future and preserve your wishes
When someone dies without leaving behind a valid Will, it can cause additional heartbreak, stress, and complication for the loved ones left behind who are already grieving. It is not uncommon for disputes to arise over intestate estates when the testator has failed to leave clear instructions, letting their family know their wishes. All this can be avoided by getting your estate plan done!
An experienced estate planning lawyer can make the process simple and will help identify who the best person is to appoint as your executor, and how to structure your estate to ensure who you want to benefit ultimately will.
Doing your estate plan also gives you the opportunity to leave clear instructions for your funeral and burial arrangements to lift some of that burden from your family who will have to arrange this.
As a leading Wills and Estates law firm, our lawyers understand the importance of planning properly to avoid the many issues that can arise during the estate administration process and mitigating the risk of litigation arising which will only delay the estate administration and cost your estate.
Whether you are an executor named in a Will seeking support to administer a deceased estate, or you are the next of kin and your loved one did not have a Will and you need to apply for Letters of Administration, we can help guide you through the process.
Please contact our Wills and Estates Department Manager, Donna Tolley, on direct line 07 5506 8241, email dtolley@attwoodmarshall.com.au or free call 1800 621 071 for all enquiries.
You can also book an appointment with our team using our online booking app. Click here.
