A Will is not only a record of how you would like your estate distributed. A Will appoints and authorises a person to deal with your estate. Without a Will, administration becomes much more complex and time consuming.
Some real-life examples are provided below.
A. Identifying the beneficiaries
When a person dies without a Will, it is called “dying intestate”, in which case the intestacy rules of the particular jurisdiction will determine how the estate is to be distributed.
In NSW, if a person dies without a spouse or child, their parents inherit the whole estate. If their parent’s have also died, their siblings share the estate equally between them. There will normally be additional costs and effort to provide evidence of family relationships including birth certificates and death certificates.
B. Small estates
Small estates may be able to be administered without the need for a grant of Probate. A “small estate” will be where the deceased had minimal funds in the bank, small shareholdings, a final employment payment, and/or a vehicle or two.
In such estates the Executor may be able to distribute the estate with only:
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- the Death Certificate (as proof of death); and
- the Will (as proof of their appointment as Executor).
Without a Will, the asset holder will be unable to confirm who is authorised to receive or deal with the assets of the estate. As such, they may require that the person go to the additional cost and hassle of applying to the Supreme Court for Letters of Administration to formally be appointed as Administrator for the estate.
C. Separated but not divorced
If a person dies intestate, their spouse may be entitled to all or some of the estate. This applies even if the parties are separated.
In NSW, the spouse is entitled to the entire estate unless there are children from a previous relationship. In which case, the spouse is to receive more than half the estate. It is only after a formal divorce that the spouse ceases to be entitled under intestacy.
Example:
Priya and Pankaj had been separated for 4 months but could not divorce until 12 months from the date of separation.
Pankaj died without a Will. He is survived by Priya and his daughter from a previous relationship, Maryam.
Maryam would like to apply to receive and administer her late father’s estate. However, because he was still married to Priya at the time of his death, she needs to:
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- Serve Priya with a copy of her application;
- Seek Priya’s consent to her application; and
- If she is unable to get Priya’s consent, provide evidence to the Supreme Court as to why Priya should not be appointed as Administrator or receive part of the estate.
It is strongly recommended that when parties to a marriage separate, they each execute a new Will to avoid the complexity that may arise due to the rules of intestacy.
