Where there’s no will, there’s still a way 5 things about intestacy

Every­one has an estate plan – even if you did­n’t plan one. If you die with­out a will, the rules of intes­ta­cy will apply. The rules of intes­ta­cy dis­trib­ute the estate in accor­dance with spe­cif­ic rules in the Suc­ces­sion Act 2006 NSW. Leav­ing your estate plan­ning to the rules of intes­ta­cy may mean that assets will not be dis­trib­uted in the way you intend­ed. Here are five things to know about intestacy:

1. Who gets first pri­or­i­ty to your estate?

Broad­ly, in New South Wales, the order of pri­or­i­ty ranks a spouse first, then chil­dren, par­ents, broth­ers and sis­ters, grand­par­ents, and aunts and uncles. The leg­is­la­tion acknowl­edges the chang­ing ideas of fam­i­ly”, with spe­cif­ic pro­vi­sions deal­ing with mul­ti­ple spous­es, adopt­ed chil­dren and chil­dren born of sur­ro­ga­cy arrange­ments. With many instances of blend­ed” fam­i­lies today, where fam­i­lies are recon­struct­ed from mul­ti­ple rela­tion­ships result­ing in mul­ti­ple spous­es and/​or defac­to part­ners, half and/​or step-sib­lings/chil­dren, it is some­times dif­fi­cult to deter­mine fam­i­ly struc­ture and less straight­for­ward to deter­mine who gets bet­ter pri­or­i­ty than some­one else.

2. De fac­to rela­tion­ship and intestacy

Where there is a de fac­to rela­tion­ship, it may be dif­fi­cult to deter­mine if the nature and length of the rela­tion­ship meets the legal thresh­old. Each case is very fact spe­cif­ic. Take the two cas­es below as examples.

  • a. Unsuc­cess­ful de fac­to claim

In Sadiq v NSW Trustee and Guardian [2016], the Court of Appeal dis­missed a claim that Mr Sadiq was the de fac­to part­ner of the deceased. Mr Sadiq pro­vid­ed some doc­u­men­tary evi­dence list­ing his address as the address of the deceased but evi­dence giv­en by neigh­bours and the state of the prop­er­ty upon the deceased’s death indi­cat­ed the deceased lived alone. The Court of Appeal upheld the first instance judg­ment that there was no defac­to rela­tion­ship. This meant that on intes­ta­cy, Mr Sadiq would not have been enti­tled to the deceased’s estate.

  • b. Suc­cess­ful de fac­to claim

In NSW Trustee and Guardian v McGrath [2013], the Court held Mr McGrath was in a de fac­to rela­tion­ship with the deceased and the estate should be dis­trib­uted on that basis. There was a ques­tion as to whether Mr McGrath and the deceased lived togeth­er” as they did not for­mal­ly move in togeth­er but the deceased was a reg­u­lar guest at Mr McGrath’s home. The Court looked at sub­stance of the rela­tion­ship and not the label put on it — Mr McGrath did not describe him­self as the de fac­to partner.

3. Who ben­e­fits – the 30 day survivor
To receive a ben­e­fit in your intes­tate estate, an eli­gi­ble per­son has to sur­vive you by 30 days. There is no sur­vivor­ship” require­ment if you make will.

4. Who deals with your estate?
If you die intes­tate, an admin­is­tra­tor has to apply for Let­ters of Admin­is­tra­tion from the Supreme Court in order to deal with your estate. The admin­is­tra­tor has var­i­ous duties includ­ing arrang­ing your funer­al, pay­ing any debts and tax­es, col­lect­ing and dis­trib­ut­ing the assets of your estate accord­ing to law and keep accounts/​records of the estate.

5. Where there is no per­son enti­tled to your estate, tra­di­tion­al­ly, the estate pass­es to the State bona vacantia
If you die leav­ing no per­son who is enti­tled to your estate, the State is enti­tled to the whole of your estate. Bona vacan­tia means unclaimed goods” or prop­er­ty that has no own­er”. If there is an appli­ca­tion, the State then has the dis­cre­tion to make pro­vi­sion to any per­sons depen­dent on you, any per­son who, in the Min­is­ter’s opin­ion, has a just or moral claim” on you, any organ­i­sa­tion or per­son for whom you might rea­son­ably be expect­ed to have made pro­vi­sion or the trustees of any of the above. This cov­ers a broad cat­e­go­ry of per­sons and organ­i­sa­tions that could make a claim on your estate.

If you or a loved one requires assis­tance with cre­at­ing or chal­leng­ing a will, please con­tact Swaab Attorneys.