March 5, 2012

What happens if you die without a Will?

In the event that you do not have a valid Will, on the date of your death, your estate will be distributed in accordance with the rules of intestacy, which are as follows:

If you have a Spouse and no Children

Your entire estate will go to your spouse.

If you have a Spouse and Children

If the value of the estate is less than $150,000.00 excluding household chattels, then all to your spouse.  If the value exceeds $150,000 excluding household chattels then household chattels to the spouse, $150,000 to the spouse and:

  • If one child -  one half of the rest of the estate, with the child receiving the other half; or
  • If more than one child – one third of the rest of the estate, with the remainder of the estate being divided equally among the children.  If a child of yours has predeceased you, leaving children, then their children take the interest of that your child would have taken, equally. 

Example:  Bill dies leaving his wife Mary and two children Peter and Mark.  His estate is worth $500,000.00 (excluding household chattels).  Mary receives $150,000.00, household chattels and $116,666.66.  Peter and Mark each receive $116,666.66.

No spouse but have Children: children receive estate divided equally between them.

If you have a De facto spouse: to receive a spousal entitlement they must be the sole partner of yours in a de facto relationship with you, for a continuous period of not less than 2 years prior to death.

De facto relationships are defined as two adult persons, who live together as a couple, and who are not married to one another or related by family.

Example: Bill and Mary have been dating for two and a half years, but only living together for 18 months.   Bill has two children from his previous marriage: Peter and Mark.   His estate is worth $500,000.00.  In addition, Mary and Bill bought a house as tenants in common for $200,000.00 eighteen months ago, but it is now worth $300,000.  Bill dies without a Will.   Mary receives $0.00 Peter and Mark receive $250,000.00 each for the $500,000.00 and then Bill’s half interest in the house.  Peter and Mark don’t like Mary and therefore decide that Bill’s half interest in the house should be in the form of cash.    

No spouse, no Children: estate distributed equally between the following classes (in order):

  1. Parents;
  2. Brothers and Sisters;
  3. Nieces and Nephews;
  4. Grandparents;
  5. Aunts and Uncles
  6. Cousins;
  7. The Crown.

Example: Bill dies with no children and no spouse.  His parents died in a car crash 10 years ago.  He had two sisters and three nieces.  They were unfortunately killed in the same plane crash as Bill.   His Grandparents are also deceased.  His mother had a sister who died leaving a daughter, now 38.  Bill has never met his cousin, but now, due to his not having a Will, she is inheriting his $2.5 million estate. 

ESTATE PLANNING MEANS PASSING ON YOUR SUCCESS NOT DISTRESS

Need advice about estate planning or making a will? Contact the experts at Rouse Lawyers today.