Intestacy – dying without a Will

Do you plan to leave this life with unfinished business?

The purpose of this post:
⦁ to consider the options available for distributing everything we leave behind when we die
⦁ to prompt us to take responsibility for our assets and belongings
⦁ to understand how someone else’s estate might be managed, especially if you are a beneficiary

The 3 main options are:
1) Intestate i.e. not making a Will
2) Making a Will for distribution of our estate and personal effects and provision for dependents
3) Testamentary Trust – a Will with additional provisions for distribution
This first post will cover Intestacy, leaving no Will or instructions for your estate when you die.
The other 2 topics, Making a Will and Testamentary Trust will be posted to this website soon.

DISCLAIMER
This post is written in everyday language so that anyone reading it can gain some insight concerning the topic of Intestacy. I am not a Lawyer or an Expert on Wills, Intestacy, Trusts, Estate Planning or any of these related topics nor am I qualified to give advice. I recommend you seek the necessary professional advice when you are making decisions surrounding your estate, belongings and dependents for when you die. I reside in Australia therefore much of what I discuss pertains to Australian Law or the relevant State in Australia. Regardless of geographic location, these posts are intended to provide a starting point for your investigation.

Intestacy

Dying without a Will is called Intestate. Several searches on the internet indicate that between 50% – 90%+ people in most countries die Intestate.

In many countries, when there is no next of kin, the government inherits the estate. This depends largely on the culture and/or laws of each country.

Note: In Australia, if you are 18yrs+ you can make a Will. Therefore if you die at 18yrs+ without a Will the Intestacy Rules will apply to any assets, belongings or dependents that you leave behind.

Reasons why people die Intestate:
Can’t be bothered Making a Will
Assume it will all be taken care of
It’s too expensive to make a Will
I’m too young to Make a Will
I don’t have anything worth leaving
Dying unexpectedly

Here’s what will take place
It will be taken care of by an Administrator. This Administrator can be a family member, a Lawyer or a member of The Public Trust.

Your debts, taxes and expenses will be paid from the proceeds of your estate(i.e. your assets of financial value) and any remaining balance will be distributed to your family.

If you have personal effects of value, they may be sold to raise funds to pay debts and expenses. If you have enough funds in your estate to cover debts and expenses, your personal effects, including those of monetary value, will be available to the beneficiaries as per Intestacy Rules.

Intestacy Laws have an order of priority for distribution which looks something like this: Spouse or de facto partner, and issue (children, grandchildren)

Only if there is no spouse or issue then the next beneficiary in line will be chosen in this order: your parents, brothers and sisters, nephews and nieces, then grandparents, then uncles, aunts and cousins (Public Trust may make provisions in some cases and are looking for best outcomes).

Public Trust does not seek any further relatives past the list mentioned – the estate will default to them.

In the case of joint bank accounts and jointly owned property, the ownership defaults to the surviving joint owner/s – it does not form part of the estate for settlement and distribution.

Here’s what you may not want to take place:
If you did not want particular people to become beneficiaries of your estate, you now have no control over this. The Rules of Intestacy prevail.

If you wanted a special someone to receive a particular gift then you have no control over this.

The effort to settle your affairs and distribute your estate is a huge task/burden on your next of kin who are likely grieving your death. It can take a very long time for them to finalise your estate due to the emotional trauma surrounding death and loss.

If no suitable next of kin has come forward to Administer the estate, The Public Trust will appoint one of theirs, take control of settlement and distribution, and this could be a far greater cost than any Will you could have drawn up.

If there are dependent children or disabled dependents, where you envisioned them to go may not be carried out.

No one may know your wishes if you never expressed them or wrote them down.

Too Young to Make a Will?
If you are 18yrs and over you can Make a Will

I don’t have anything worth leaving!
Many people don’t realise they have an estate. Your estate consists of your assets and can include any of these: money in cash and bank accounts, investments, shares, royalties, personal belongings, collections, valuables, equipment, vehicle, Insurance, Superannuation, Real Estate, animals and more. Do you have any of these?

Start making a list of your assets. You will be surprised at what your estate amounts to.

It is a good exercise to determine your worth because it is a huge decider in how you write your Will.

Life Insurance, Superannuation

If you have any Life Insurance or Superannuation, you can nominate beneficiaries. If you don’t have a Will then depending on the owner of the policy and or the nominated beneficiaries, the Insurance Company and Superannuation Fund may find your nominations invalid and they will nominate the beneficiaries or estate. The way your estate is distributed may not benefit your original nominees at all.

Superannuation can have a Life Insurance component attached to it. Check your policy.

Death by accident could result in an Insurance payout to your next of kin.

What about children or other dependents such as disabled or elderly in your care?

Whether your children have one parent or two, if you don’t have a Will, and the children are orphaned or cannot go to a surviving parent for any number of reasons, family members can come forward to take custody of your child/children.

The Administrator will make the decision, with some input from any surviving family if they come forward. Preferably this will be a good choice for all concerned but you now have no control over this as you are not here and you did not leave instructions.

We can never assume godparents will take our children, circumstances change throughout everyone’s lives.

This applies to other dependents such as disabled and elderly family in your care.

Pets and other Animals

Don’t forget your pets. Don’t assume a family member will take care of them. In this case, a Will is not necessarily the only solution because Wills take such a long time to settle, what happens to your animals meantime?

Your pets can die if you don’t make the most basic decisions for them before your death. You only need to research RSPCA and other Animal Shelters to see how many animals have become homeless due to their owners dying. Is your animal a likely candidate for adoption if it ends up in a shelter?

There are a few topics you can follow regarding Pets:

1) There is a topic on this website called Advanced Care Plan – pets can be included along with many other wishes. This is a great place to express the wishes for immediate care for your pet/s.

2) There is a section for Pets under the blog topic on Wills on this website. Especially if you want to leave funds or donate to an Animal Charity for your pet/s.

3) Subscribe to the notifications in the box provided on this website which will inform you of the latest topics. There will be an entire topic dedicated to what we can do for our pets after we die.

Other animals such as livestock form part of the estate as property. If you don’t have a Will the Intestacy Rules will apply.

The Cost of Intestacy

The cost can be broken down into separate areas:
⦁ Standard Costs
obtain Letter of Administration, advertisements for creditors, request for Death Certificate
⦁ Administration charges, fees and taxes
Administration to settle and distribute estate, debts to be settled and taxes to be paid for the estate, funeral expenses.
⦁ There are varying expenses involved with settling the estate
Court expenses if anyone contests any part of the settlement and distribution and/or custody of children

Cost of Administration mistakes.

Administration of an estate is not something we get to do every day. If you are unfamiliar with the role of Administrator and you make mistakes you may be liable e.g. failure to pay creditors or advise creditors, you as the Administrator can become liable for any debts or unpaid expenses or fees.

Once the estate is distributed you cannot retrieve any funds from it to cover mistakes – mistakes that may not surface for weeks or months.

No one is under any obligation to take on this role – utilise the Public Trust or a Lawyer if necessary.

Small Estates may have some costs waivered

In some cases, such as small estates and depending on the value of assets, some costs can be waivered and it is worthwhile inquiring to save time and money. This link discusses some of those circumstances and is an easy short read http://www.inheritancesolutions.com.au/letters-of-administration/

The Public Trust – provides Testate and Intestate services to the public

The Public Trust exists in some countries, including Australia. They manage Intestate Estates. If a family member cannot take care of Administration of the estate and does not employ a Lawyer, the Public Trust will nominate an Administrator from their department.

If you follow the link provided here, you can see at a glance as you scroll through all of the possible charges/fees. Time and resources come at a cost. https://www.pt.qld.gov.au/wills/fees-and-charges/

You can also see by the list of fees the amount of work required to settle an estate.

Is it easier to just leave it to The Public Trustee as an Intestate Estate?

The biggest factor is the additional cost it will take the Administrator to determine everything required to settle the estate as per the Intestacy Laws and timeframes. One of their missions is to establish all of your beneficiaries by doing a number of searches, this could include people overseas, this alone could become costly.

While The Public Trustee offers a free Will service(pre-death), their post-death costs i.e. Administering the settlement of the Estate, may cost you more than a Lawyer so you will need to seek advice before proceeding with either.

See if The Public Trustee and several different Estate Lawyers can review your estate and give you an estimate. They will walk you through the information they need from you so this can be very helpful when you don’t know where to start.

This website will be covering more topics such as:
Making Wills, Testamentary Trusts, Life & Funeral insurance, Care of your Pets, Organ Donation, Funeral details, choosing Caskets or making your own,choosing Burial Plots or spreading Ashes & some of the restrictions and laws, procedures to be Returned Home for burial overseas and so much more.

New topics and checklists – want to be informed when they are ready?
Add your first name and email address – see the box provided.

Leave a comment and share your own experiences.
If you have a question I will respond as soon as I can.

~Chrissie

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8 comments

  1. Ah, learned a new English word. I had never heard of intestacy. We emigrated a couple of years ago to Spain and bought a house over here. So we made a will at the same time the papers of the house were taken care of. Not only because we live in a foreign country now, but especially because our son lives here too and the Dutch rules are better than the Spanish. So we made our will according to Dutch law. 🙂

    1. Hi Hannie, that is a very interesting case and with the way we are spreading ourselves across the globe it is more common to hold assets outside of our mother country or country of citizenship. So are you saying you made your Will in Holland for assets held in Spain?

      ~Chrissie

  2. Thank you for writing an article on a very important topic. Even if we are young, life can turn suddenly in other directons,a and some times be fatal at a young age. Caring about your loved ones includes also the “bad” times in your life. How to take care of them, if you suddenly are taken away, for example, by an accident.
    If you haven´t made arrangement you could unintentionally cause your loved ones inreapirable damage economically. I consider it my responsibility to have thesetopic sorted out for my family, by a will.

    You have written av very good “recipe” on how to cover your self and your family in the case of unexpected death. The consequences of not having a will made is clear.

    Even if I don´t live in Australia, I recognize the way that the assets and estates belonging to a person, after that persons death, will be handled and distributed.

  3. Hey Chrissie,

    This is a really important and insightful article. It isn’t something that I would normally come across and read about, but I am very happy that I have. I have learned quite a lot and what I need to do later in my life. I think this would be beneficial for some friends and family too so I have forwarded it on to them. I have encouraged them to comment and if they have any questions then they should get in touch, if that is OK?

    Thank you for sharing and keep up the amazing work.

    All the best,

    Tom

    1. Hi Tom, you are right it is not a widely shared topic yet an important one.Thanks for spreading the word, the more awareness the less stress for those we leave behind.

      ~Chrissie

  4. Hi Chrissie,
    this is such a relevant topic for many people and should be eye-opening for all who think there is no need to think about the time when we are gone.
    I’ve heard of both- of people who did take care of everything, to the smallest details, but also of people who think someone will deal with all, it’s not their task. I even overheard someone saying: “I’ve been taking care of everything through my whole life, I can’t be expected to do it even in my afterlife…Let them do something, for a change…”
    While this person might have a reason to say that (or maybe not), I know I would never want my child to be left with either uncertainty about our wishes, having to guess, nor would I like her to be forced to deal with any legal issues that might arise because we haven’t taken care of it in our lifetime.
    A very much needed post, thank you!

    1. Hi Minaher, I feel the same way. We were so lucky our father did this for us and we knew we were exceptionally lucky – hence the website. Thanks for stopping by.

      ~Chrissie

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