Tuesday, December 8, 2015

Final Post for 2015 and Season's Greetings

With the annual leave season starting in earnest over the next couple of weeks and many advisers taking either extended leave or alternatively taking the opportunity to catch up on things not progressed during the calendar year, last week’s post will be the final one until early 2016.

Similarly, the social media contributions by both the View and Matthew will also largely take a hiatus until the New Year as from today.

Thank you to all of those advisers who have read, and particularly those that have taken the time to provide feedback in relation to posts.

Additional thanks also to those who have purchased the various versions of ‘Inside Stories – the consolidated book of posts’ (see - http://www.amazon.com/Matthew-Burgess/e/B00L5W8TGO/ref=sr_tc_2_0?qid=1413149165&sr=1-2-ent).

The next edition of this book, containing all posts over the last six years, edited to ensure every post is current and organised into chapters for each key area should be available early in 2016.

Very best wishes for Christmas and the New Year period.

Image credit: Markus Spiske cc

Tuesday, December 1, 2015

What happens to assets in the estate if a person dies without a will?

A previous post has looked at what happens to assets in the estate if a person dies without a will (see - http://blog.viewlegal.com.au/2011/11/how-do-intestacy-rules-work.html).

If a person dies without a will, the law says that their assets will be distributed to their family, as determined by a set formula (the ‘intestacy’ rules). The set formula is different in every Australian jurisdiction. There are a range of issues which will determine which jurisdiction’s rules will apply.

The intestacy rules will also apply where a person dies without a valid will in relation to all of their assets. In this regard, it can in fact be possible to die ‘partially intestate’. This simply means that there are assets in a person’s estate that are not validly dealt with under the will in place at a person’s death.

The following summary gives a broad example of the way in which the intestacy rules often work. If a person dies leaving:
  1. their spouse, but no children: their spouse receives everything; 

  2. their spouse and children: their spouse receives the first $150,000 and one half of the balance of the estate if there is one child, or one third of the balance if there is more than one child. The Testator’s children share the balance between them;

  3. children but no spouse: their children receive a share each, but only if 18 years of age or married;

  4. no spouse or children: the person’s parents will share the estate (if both are alive then equally);

  5. no spouse, no children and no parents: their siblings share equally.
A spouse includes a legal and de facto spouse.

The amount received by each person will depend on the value of the estate and whether any other beneficiaries are entitled to the assets of the testator.

If the person does not have any family members who qualify, then the assets may pass to the government.

It is necessary that someone apply to the court to be appointed as the administrator, to ensure that the person’s estate is properly administered. This normally adds time and significant extra costs to the administration of the estate. If the testator has young children and a guardian is needed, an application to the court may also have to be made.

Image credit: Mathias Pastwa cc