When you die, any assets you own in your personal name form what we call your ‘estate’.
Your estate can be dealt with in one of two ways; either in accordance with the terms of your Will, or in accordance with to the laws of Intestacy.
If you do not have a Will, then the law will determine who receives your estate. This law is known as the law of Intestacy. Which provides for the following:
a) you leave a spouse and no children – your spouse will inherit all your estate.
b) you leave a spouse and a child or children (of that relationship) – your spouse still receives all of your estate and your child or children receive nothing.
c) you leave a spouse and a child or children (from a previous relationship) – your current spouse would receive all of your personal effects together with the first $451,909.00 of your estate. After that, your spouse receives 50% of the rest of your estate, and the remaining 50% is split equally between your children.
This scenario can cause problems if you have less than $500,000.00 in your estate as then your spouse would essentially inherit the whole of your estate, leaving very little for any child or children from your previous relationship.
d) Your spouse has passed away before you or you have formally separated from a former spouse and are single at the time of your death – then your children would inherit your estate in equal shares. If any of your children have predeceased you, their children (your grandchildren) will inherit their parent’s share.
If you don’t have a spouse or children, then your estate would pass to your parents, but if your parents have passed away before you, then it would pass to any siblings.
If you have no parents or siblings who survive you, then the law of Intestacy provides for your estate to pass in the following order: to your grandparents, your aunt(s) and uncle(s), or then to your cousins.
Under the current laws of Intestacy, if none of the above situations apply and you leave behind no living relatives, then your estate would be paid to the Crown (i.e. the federal government).
It is very common that the laws of Intestacy do not reflect a client’s wishes and can result in the following issues after your death:
Having a Will puts you in control. You are able to decide who will receive your assets rather than allow the law to apply.
With many online ‘DIY Will Kits’ available for free and without the need to speak to a lawyer, it’s important to understand these very simple Wills may often cause headaches for your family after you die. For more information on the pitfalls of informal Wills and DIY kits click here.
It is essential that you speak to a professional to ensure that your Will correctly conveys your wishes and is legally enforceable. In particular, if you have superannuation, interests in a business, Family Trusts or a blended family, you should obtain expert advice.
At Coulter Legal, we pride ourselves on providing tailored and comprehensive advice with respect to your estate planning and we will ensure your Will is both legally compliant and effective so that your loved ones are not left having to face the uncertainty and the expense of litigation after your death.