Many people put off making a Will. Some believe that they are healthy and death is an event in the distant future that will not occur for many years. Others do not like to consider end of life decisions for fear of bringing ill health upon themselves.
However, the consequences of dying without a Will can be emotionally and financially significant for loved ones who are left behind. This is especially the case for blended families.
A person who dies without a Will is said to have died ‘intestate’ and their Estate will be distributed in accordance with a prescribed formula relevant to their family circumstances. In NSW, this is set out in the Succession Act 2006. This formula may distribute the deceased person’s Estate in a manner contrary to what they may have intended. These issues are explored in the examples of blended family situations below.
- A person has children from a first marriage, but later divorces and re-marries but has no children from that second marriage.
Upon that person’s death, the surviving spouse from the second marriage is entitled to the following under the intestacy rules:
a) All of the deceased person’s personal effects;
b) An amount set by legislation, known as a “statutory legacy”, valued at $476,551.31 (current as at 1 March 2019); and
c) 50% of the remainder of the deceased person’s Estate.The surviving children from the first marriage are entitled to the remaining 50% of the deceased person’s Estate under the intestacy rules.
- A person has children from a first marriage and separates from but does not formally divorce that first spouse. The person later enters into a de facto relationship and has children with their new partner. All children and both partners survive the deceased person by more than 30 days.
Both surviving partners of the deceased person will be entitled to share the whole of the Estate equally under the intestacy rules, unless they have entered into a written “distribution agreement” or the Supreme Court has made a “distribution order” on the application by at least one of the partners or the deceased person’s personal representative.The deceased person’s children, irrespective of whether they are a child from the first marriage or a child of the de facto relationship, will NOT have any entitlements to receive a share of the Estate under the intestacy rules.
Many of these problems may be avoided by ensuring that you have in place a carefully drafted Will that is kept up-to-date with changes in your circumstances.
Contact our Estate Planning team for advice on ensuring that a valid Will is in place in respect of your Estate.