The need to have a valid will can be highlighted when contrasting what will happen to your estate if you die intestate (i.e. without a will).
Take for example Allan who dies without a valid will, he is survived by his de facto partner Sally and their child Lexie who is under the age of 18.
Generally speaking, if Allan had a will, he would likely appoint his partner Sally as his executor and leave his entire estate to her. If Sally did not survive him, then he would likely appoint another adult such as a close friend, family member or his solicitor to act as his executor and would leave his entire estate to his executor to hold that on trust for his daughter Lexie, until she turned 18. Until Lexie turned 18 years old, that executor would have discretion as to whether or not to release some or all of those funds (depending on the terms of the Will) towards Lexie’s maintenance, education and advancement in life.
What happens when there is no Will?
- If Allan died, his partner Sally would be entitled to act as Administrator of his estate (an Administrator has a similar role of an Executor). To be appointed Administrator, Sally must firstly lodge an application with supporting affidavit material asking the Court to make a declaration that she was Allan’s domestic partner as at the date of death. This additional step can be costly and time consuming. If Sally were appointed pursuant to a Will, there would be no requirement to obtain this Order.
- Under an Intestacy in South Australia as the legislation currently stands:
- Sally would receive the first $100,000 of Allan’s estate
- The balance would then be split equally between Sally and Lexie
This can have significant effects on the surviving partner if they are reliant on receiving funds from their partner, eg pay a mortgage.
- Lexie’s share of the estate would be held by the Public Trustee until she attains the age of 18 years. This can result in additional estate fees whilst the Public Trustee invests the funds. It is the sole discretion of the Public Trustee as to whether any funds are released towards Lexie’s maintenance, education or advancement in life, not Sally. Consequently, Sally would have to consult with the Public Trustee each time she needed money for Lexie.
- If there are sufficient assets that warrant it, Sally will need to obtain a Grant of Letters of Administration in Allan’s estate (the grant issued where there is a will is called Probate). There is not a significant difference between an application for Letters of Administration or Probate (which might be required if Allan had a Will) in terms of the drafting required and the detail provided and the filing fees payable. Where there is not will, there are additional reporting requirements to the Public Trustee and an additional filing fee which is presently $219 which must be.
What if Allan was still legally married and in a domestic partnership with Sally?
In Allan’s situation, if he also had a wife from whom he had not yet divorced, both his wife and Sally would be entitled to act as his Administrator. In fact, his wife could potentially lodge an application for Letters of Administration much earlier than Sally as she must wait for a Declaration from the Court that she was at the date of his death a domestic partner. The estate will also be divided such that Sally and the wife would be entitled to share the first $100,000 and they would share the remaining half, with the Public Trustee to hold Lexie’s half until she turns 18 years old. This opens up the possibility of a claim under the Inheritance (Family Provision) Act.
It is therefore important to review your family situation and see, if you fit within the above scenario, whether this reflects how you would like your estate to be dealt with when you pass away. It is important to review the terms of any Will that you have to ensure that they accurately reflect your current wishes and are in line with estate planning initiatives that you have put in place with respect to all of your assets including jointly owned assets as well as your superannuation which can be a major asset of one’s estate.
To find out more, please contact our Will and Estates specialists.
Written by Emma Wilkinson., April 2018.