If someone dies without a will, it can be difficult to know how to deal with their assets. This could be because they never thought about it, didn’t think they had enough assets to warrant a will, they married or divorced after making a will (which voids the will) or it is damaged to a state it cannot be read.
Even if they have a relatively little in assets, this can lead to messy family disputes as family members disagree over who receives which assets. We recently acted for a client where the estate was small, worth a few thousand dollars, but there were a number of items of sentimental importance which caused disagreement between the children of the deceased.
Below we set out what happens if a person dies without a will. If you want to minimise the risk of family fighting when you pass, call Laird Lawyers on (08) 6271 3903 for a free consult. We offer fixed fee wills starting from $300+GST for a simple will ($495 for a couple) and $690 for a will with a testamentary trust ($990 for a couple). For more information, visit our wills page: www.lairdlawyers.com.au/wills-estate-planning-probate
If someone you know has passed without a will, we charge a fixed fee of $770 (incl. GST) plus the Court filing fee, which is currently $370 to obtain a Grant of Letters of Administration.
1. Applying to the Court
If the estate is worth less than $10,000, then the family may be able to agree to a distribution of the assets, if they can agree.
If the estate is worth more than $10,000, the next of kin will need to apply to the Supreme Court for a Grant of Letters of Administration. Without obtaining this court document, your family will not be able to sell or transfer ownership of many of your assets.
2. Who is Entitled to a Distribution from the Estate?
Because the deceased has not formally stated their testamentary intentions, the Administration Act 1903 has an arbitrary formula setting out who may be an Administrator of the estate, who is entitled to distributions from the estate and the portions of the estate to which people may be entitled.
Section 14 of the Administration Act 1903 provides a table detailing the persons who are entitled to share in the estate in particular circumstances. Below is a simple diagram of those who are entitled to a share according to section 14.
An issue which has come up with clients in the past is with respect to de facto partners, particularly where the relationship is 2 to 3 years old and the family are not supportive of that relationship. For example, a recent client’s mother died leaving everything to her de facto partner intending that he pass it on to the children when he passed. After he died, years later, his carer claimed to be a de facto partner and entitled to half of the estate (see entitlements below).
Another example is where a marriage broke down, but they never divorced. One of the spouses entered a de facto relationship and had been in that relationship for about 3 years. Because they never divorced and the de facto partnership was under 5 years, the de facto and ex-spouse evenly split the entitlement, which the deceased clearly would not have wanted if they had created a will.
3. What are the Respective Entitlements?
Section 14 of the Administration Act 1903 has a set formula for determining the amount a relative is entitled to receive from a deceased estate. The most common scenarios are set out below. It is important to note that a Deed of Family arrangement can be used to formalise a different distribution, such as give effect to deceased’s wishes but please note there may be tax implications such as CGT for changing land entitlements.
A. Spouse and Children/Grandchildren
The Spouse will be entitled to all household chattels, the first $50,000 and a third of the balance (half if there is only one child). The children receive in equal shares two thirds (half if there is only one child) of the balance. If a child died before the deceased but left grandchildren, those grandchildren take their parents share equally but the grandchildren from surviving children of the deceased receive nothing.
For example, of a $150,000 estate:
(a) the spouse receives all household chattels and either, $100,000 if there is only one child (first $50,000 + half the balance) or $83,300 if there are multiple children (first $50,000 + third the balance); and
(b) the children share equally $50,000 if there is only one child (half the balance) or $66,700 if there are multiple children (third the balance). If there were 4 surviving children and 1 predeceased but left 2 children (grandchildren of the deceased), each child receives $13,340 (a fifth of the balance) and the 2 grandchildren receive $6,670 (their deceased parents share).
B. Children/Grandchildren but no Spouse
The estate is split equally between the children. Where one child died before the deceased but left children (grandchildren), those grandchildren equally split their deceased parents share and the grandchildren of surviving children receive nothing.
C. Spouse with no children
If the deceased left no children, parents, siblings nieces or nephews, or the estate is worth less than $75,000, then everything goes to the spouse. Otherwise, the Spouse receives all household chattels, the first $75,000 and half of the balance. Of the other half, the parents (equally if both survive the deceased) are entitled to the next $6,000 and half of the rest goes to the parents and the other half is split between the siblings. Note that if a sibling does not survive the deceased but left children (nieces/nephews of the deceased), those children take their parents share equally.
For example, $100,000 estate where a spouse, parent(s) and siblings survive, is split:
(a) to the spouse: $87,500 (being $75,000 + half of the balance) and household furniture;
(b) to the parents: $9,250 (being $6,000 + half the rest of $6,500); and
(c) to the siblings (or child of deceased sibling): $3,250 (half the rest of $6,500) split equally.
If neither parents survived then that share goes to the siblings.
D. No Spouse, No Children & No Grandchildren
The formula gets messy at this level and a family tree is needed. We will advise you depending on your particular circumstances but the general priorities is:
(a) Parents and siblings;
(c) Uncles and aunts, or children of an uncle or aunt who died before the deceased.
If none of the above survive, the estate passes to the Crown.
4. Who makes the Application for Letters of Administration?
Persons who may make an application for a Grant of Letter of Administration is generally one or more persons entitled to a distribution from the estate residing in Western Australia.
Where more than one person is entitled to apply for a Grant of Letters of Administration, all those persons will need to jointly apply or, usually the more practical option, one person applies and all others entitled sign a consent, like a renunciation for a Grant of Probate.
In certain cases, the Court may require sureties to guarantee that they will make good any loss from the Administrator’s actions.
If you want to discuss how the above general information applies to your circumstances, please do not hesitate to call Laird Lawyers on 6271 3903 or email firstname.lastname@example.org.