On our last article, we had answered the 10 most frequently asked questions about last wills.
What if a person dies without a Will. It is commonly thought by people that if they are young and healthy, that they do not need a Will. However, everyone over the age of 18 should seriously consider making a Will as it is an important part of estate planning because we never know what might happen in the future.
Here are another 10 frequently asked questions if a person dies without a Will:
1. WHAT HAPPENS WHEN A PERSON DIES WITHOUT A WILL?
In Western Australia, the Administration Act 1903 (WA) governs the procedures and laws relating to probate and administration. If you don’t have a legal Will you have died “intestate” and your estate will be divided according to the rules of intestacy in pursuant to the Administration Act 1903 (WA).
If you die intestate, section 14 of the Administration Act 1903 (WA) sets out the formula for dividing your estate among your surviving family members. This means that the law decides who your beneficiaries are and how your estate is divided.
Any one or more of the adult beneficiaries of the estate are entitled to apply for a Grant of Letters of Administration. The person looking after and dividing your deceased estate is called an administrator rather than an executor in cases where a person dies intestate.
2. DOES THE PUBLIC TRUSTEE AUTOMATICALLY SELL ALL THE ASSETS IN A DECEASED ESTATE IF YOU DIE WITHOUT A WILL?
There is a common misconception that the Public Trustee automatically sells all the assets in a deceased estate if you die without a Will. This is not true. There is extensive consultation with the beneficiaries before any asset is sold. In fact, most estate’s assets – including the family home – are not sold but are transferred directly to the beneficiaries.
In cases where the beneficiaries request that any real estate be sold, a valuation is obtained and there is ample opportunity to set the reserve price and negotiate acceptable offers.
3. WHO INHERITS THE DECEASED’S ESTATE, AND HOW MUCH DO THEY GET?
The estate first goes to any debts that need paying off. This happens regardless of what is said in a will or under the intestacy laws.
After that, assets are divided up between the spouse and children first. If there are no children then the spouse gets it all, while if there’s no spouse then any children will get it all.
If there’s a spouse (or partner) and children, then the division would be as follows:
• If the intestate assets are valued at less than $50,000, the spouse gets it all.
• If the intestate assets are valued at over $50,000 then the spouse gets the first $50,000 plus one-third of the remaining estate. The remaining two-thirds is divided up between all children.
Please take note that adopted children are counted as full children for the purposes of intestacy. There is no difference between full and half siblings for the purposes of intestacy.
4. WHAT HAPPENS IF THE DECEASED HAS MORE THAN ONE SPOUSE OR PARTNER?
Assets may be divided between a spouse and a de facto partner, or one or the other might get it all, depending on the situation.
Assets are split between the spouse and partner if the deceased lived with the de facto partner for at least two years immediately prior to death and at no point in those two or more years did the deceased live with their spouse as husband and wife.
Without meeting these requirements, a domestic partner is not eligible for any of the inheritance. Conversely, they can also get it all while the spouse gets none if these conditions are met and they’ve lived in a de facto relationship for at least five years.
If there is more than one eligible partner then the inheritance is divided among them.
5. WHAT HAPPENS IF THE DECEASED HAS A SPOUSE OR PARTNER, AND OTHER FAMILY, BUT NO CHILDREN?
If the intestate estate is valued at less than $75,000 (excluding the personal belongings of the deceased, such as clothing), then the spouse and/or partner(s) are entitled to it all.
If it’s valued at over $75,000, not counting personal household possessions, then the spouse or partners are entitled to the first $75,000, plus half of the remainder. The other half is distributed in the following way:
• If the remaining half is valued at under $6,000 then the deceased’s parents get it all, where possible.
• If the remaining half is valued at over $6,000 then the deceased’s parents get the first $6,000 plus half of the remainder. The other half of the remainder is distributed to the siblings of the deceased where applicable.
6. WHAT IF THERE IS NO SPOUSE, PARTNERS OT PARENTS?
In this situation, the siblings of the deceased share it all evenly. Where some of the siblings are themselves deceased but have children, then those children inherit the share that their parents would have received.
7. WHAT IF THE DECEASED OWNED PROPERTY AS A JOINT TENANT?
If the deceased owned property as a joint tenant then the other tenant will inherit the property, regardless of intestacy laws or what is said in a will.
8. WHO CAN ADMINISTER AN INTESTATE ESTATE?
Someone, usually one or some of the beneficiaries of the estate, may apply in the Court to be the administrator of an intestate estate.
You can only apply to become an estate administrator if you are aged 18 or over and have mental capacity. Typically, someone who is entitled to receive intestate assets can apply to be an administrator, or the courts may request them to apply.
Family members can ask the Public Trustee to administer an intestate estate. However, all of the entitled next of kin of the deceased must consent to this being done before the Public Trustee will agree to do so.
If someone who is entitled to inherit is requested to apply but does not, then anyone is able to apply, including creditors. Regardless of who the administrator is, assets must be divided evenly according to dollar values, and the WA Supreme Court must be satisfied with the application and reasons given for applying.
9. WHAT IS THE DIFFERENCE BETWEEN A ”GRANT OF PROBATE” AND ”LETTERS IF ADMINISTRATION”?
A Grant of Probate is what is obtained when the executor named in the Will makes the application to prove and register a Will and obtains formal authority to administer it.
Letters of Administration is what is obtained in the case of an intestate estate (an estate for which there is no Will).
10. THE ADMINISTRATOR IS NOT DOING THE RIGHT THING. WHAT CAN I DO ABOUT IT?
If the administrator is not distributing the estate correctly then you should contact an estate lawyer for help in removing the administrator. An administrator can only be removed by an Order of the Supreme Court.
Having further questions about making your Will? Need legal advice for your Will?
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