Frequently Asked Questions About Wills

Tuesday June 5, 2012

What happens if I don’t have a Will when I die?

This is called "dying intestate". 

The Administration Act specifies how your property will be distributed if you die intestate.  The assets will usually go to the surviving spouse or partner and immediate family or to living relatives in set proportions.  This may not be what you would have wished for or what your family wants.

If there are no relatives in the categories listed in the Administration Act, then your estate will go to the Crown.

The basic rules of the Administration Act are:

  • If there is a husband, wife, civil union or defacto partner, but no surviving parents or direct descendants (children), the spouse or partner will get all of your estate.
  • If there is a spousal partner and also direct descendants, the spousal partner will receive all of the personal chattels, the first $121,500 of your estate and one-third of the remaining property.  The other two thirds will go to your direct descendants.
  • If there is a spousal partner and no direct descendants, but surviving parents, the spousal partner will receive all the personal chattels, the first $121,500 of your estate and two-thirds of your remaining property.  The remaining one-third will go to the surviving parents.
  • If there are direct descendants, but no husband or wife or civil union or defacto partner, your estate will go to the direct descendants.
  • If you do not have a partner or direct descendants, your parents will receive the whole of the estate.
  • If there are no parents, your brothers and sisters or their direct descendants will receive the estate.
  • If there are no brothers or sisters, nor any direct descendants, the estate is shared between grandparents, or if none exists, the aunts and uncles.
  • If none of these parties exist, then the Crown will receive all of your property.

The process of applying for administration in an intestacy is not time effective compared to having a Will, it can be costly and stressful for family members who must make a decision as to who would apply to the High Court for an appointment of an administrator of your estate. 

Having a Will will more than likely relieve financial and emotional strain on family members after your death and help minimise the likelihood of disputes about how your estate is to be divided up.

I have a Will but it is very old, do I need to update it?

It is important to review your Will regularly, we suggest every five years, or particularly when circumstances may change, for instance, if you marry, enter into a civil union or defacto relationship, or your relationship ends.

If you have a Will, then marry or enter into a civil union, without providing for such contemplation of either in your Will, your previous Will will be automatically revoked.  However, the situation does not apply for defacto partners.  Entering into a defacto relationship does not revoke an earlier Will.  Similarly, the ending of a defacto relationship does not revoke the provisions in a Will. 

A review may also be required if you wish to make specific provision for a person or conversely remove an entitlement to a beneficiary you may consider no longer needs financial assistance over another beneficiary who may.

What happens to money in my bank accounts?

Unless bank accounts are jointly held, as is often the case with spouses or civil union or defacto partners, bank accounts are "frozen" until the executors and administrators can produce probate or letters of administration or just a death certificate allowing the funds to be realised into the estate and distributed. 

Jointly held accounts are dealt with by survivorship (i.e. the surviving spouse or partner will automatically become the sole account holder).

How can I challenge a Will?

Generally, claims challenging the content of a Will can be brought in three ways:

  1. Under the Property Relationships Act (PRA) by the deceased's surviving spouse or civil union or defacto partner if they wish to claim their share of relationship property.  There is a procedure to follow in this case where the surviving spouse or partner makes an election whether to seek their share according to the Act's equal sharing rules, or not having the property divided under the Act and instead receives property that is given to them under the Will.
  2. Under the Family Protection Act (FPA).  Historically viewed by the Courts as a "moral" duty on the deceased to make provision for a family member and can include a spouse.  Here the claimant alleges that the deceased did not make adequate provision for the proper maintenance and support for members of their immediate family by virtue of the family connection.  Claimants under the FPA include a spouse or civil union or defacto partner, children, step-children, grandchildren and parents of the deceased.  Claims are to be made under the Act within 12 months from date of grant of administration (i.e. probate or letters of administration).  Claims are often brought by children of the deceased who for one reason or another have not been provided for under their parent's Will or where one child receives a disproportionate share to others.  To avoid a potential FPA claim, it is advisable to prepare a memo to be kept with the Will explaining reasons for omitting any beneficiary who may otherwise be entitled to receive an entitlement by virtue of a claimant under the FPA.
  3. Under the Law Reform (Testamentary Promises) Act.  This Act covers situations where you have worked for or given some other service to the deceased, who in turn promised to leave you something under the Will and then omits to do so (e.g. a caregiver who provides years of service to someone who promises to provide some financial entitlement in their Will. 

 If I have a trust, do I still need a Will?

The simple answer is "Yes".  The Will deals with administration of the deceased's personal effects at death (which are not usually transferred to a trust), as well as dealing with such assets which could not be transferred to the trust (e.g. where a life interest is left to a surviving spouse or civil union or de facto partner in the property).  On the death of the surviving spouse or civil union or defacto partner, that asset would form part of the residue under the deceased's estate to be administered and distributed in accordance with the Will maker's wishes. 

What is probate?

This is confirmation by the High Court of the granting of authority for executors of the Will maker to administer the estate and the effects of the Will maker.

When do my executors have to apply for probate?

Probate may not issue until at least seven days have elapsed since the date of death.  Application is usually completed within three months of the date of death of the Will maker.