Intestacy – Don’t Risk It!
It is estimated that nearly half of all Australians die without a will.
A lot of people fail to write a will because they either don’t want to spend the money to have a lawyer draw up a will, or they are in serious denial of their own mortality.
While the conversation around death isn’t a pleasant experience, taking some time to think about what you’d like to happen to your assets when you pass away ensures your loved ones are provided for once you’re no longer around.
What happens if you die without a valid will?
In Queensland, if you die without a valid will (‘intestate’), the Succession Act 1981 (Qld) (‘Act’) governs how your assets (‘estate’) will be distributed, after paying your bills and taxes from your estate, based on how the law would “expect a member of an average family to make a will if he or she got around to it”, which may not be how you intended your assets to be distributed.
For instance, the rules provide for a distribution of your estate if you die with a spouse and no children, the spouse gets it all. If you die with a spouse and there are children (or grandchildren) of that relationship, having an estate valued at more than $150,000, will see your spouse get the statutory amount of $150,000, the household chattels and one half or one third of the residuary estate, whilst your children (or grandchildren) will share in the remaining amount left over.
Queensland intestacy rules distribute your assets to the closest next of kin, so if there is no spouse or children (or grandchildren), provision is made for distribution to your parents, siblings, nephews, etc.
It is important to note that joint assets such as the family home are not considered part of the estate at all but automatically go to the survivor by the legal doctrine of survivorship. By the same token, a joint bank account will continue to be operated by the surviving spouse.
The rules of intestacy cannot do justice in every case in assuming how you would make a will if you “got around to it”. They cannot distinguish between the current spouse or the new relationship, the doting step-child or the neglectful natural-born child, your same-sex domestic partner or your conservative parents.
The importance of regularly updating your will
The solution to this problem is the responsible documenting of a fully considered will. Each will is as unique to the person as is each individual’s circumstances and care needs to be taken to ensure that the provisions endure. You should review your will regularly (at least every 3–5 years), and update it when things change to make sure it is valid and continues to reflect your wishes. Significant events to update your will include marriage, starting a defacto or civil partnership, birth of children to be included as beneficiaries under your will or a change in assets or financial circumstances (such as retirement).
When considering that today, much of a person’s wealth is not even capable of being left in a will, (for example, superannuation and life insurance policies are managed by binding death benefit nominations directly through your super fund; similarly, money held in a family trust or owned by a company is an asset which is not yours and on your death will not pass via a will), be cautious if you are using a do-it-yourself Will Kit or writing your own will. If you do not make your will properly or do not have it witnessed correctly, a court decision might be needed to sort out the problem.
A note about Frequent Flyer Points:
Generally speaking, your points do not constitute personal property and may not be bequeathed under a will. The terms and conditions of frequent flyer programs normally state that your account will be closed once the Airline is notified of your death and any points earned before then but not redeemed or transferred will be automatically cancelled when you die. The risk of your family members transferring points which are automatically cancelled means that transferring points after death will be a material breach of the Airlines terms. The most obvious way to get around this is to transfer the points while you are still alive (but not always possible).
Ramsden Lawyers specialises in drafting comprehensive and considered Wills including testamentary trusts. Feel free to contact our Succession Law team by submitting an online inquiry, or calling us on (07) 5592 1921.