Intestate Law in NSW

Intestate Law in NSW

Intestate Law in NSW

Find out more about intestacy laws in New South Wales, who is an eligible beneficiary of an intestate estate and the importance of having a valid will.

When someone dies without a will or dies intestate in New South Wales, their assets are distributed as per the intestacy laws, not as per the deceased’s wishes. There are specific guidelines as to who will become the beneficiaries, and the deceased’s assets will generally be distributed to the next of kin. But what happens when there is no spouse, children or living relatives? Let’s take a closer look.

 

What is Intestacy Law?

When someone dies with a will, the executor appointed will apply to the Supreme Court for probate to distribute their assets. However, when a person dies in NSW without a valid will, the estate is distributed by an authorised administrator appointed by the Supreme Court of NSW. If there was no will made before a person’s death, they die as an intestate.

The Intestacy laws are relevant legislation set out as per the 2006 Succession Act, describing how to administer an estate when there is no will. The law defines the legal entitlements and distribution of assets and specific information regarding making, amending, and executing a will.

The rules of intestacy are a legal guide that determines who will receive your assets in the event of your death when there is no will. Every state and territory in Australia has its own rules that determine who is next of kin and what portions of the estate they are entitled to.

The Rules Of Intestacy in NSW

The Succession Act 2006 determines the rules of intestacy in NSW. The act sets out an inheritance formula that explains how assets are distributed with specific details regarding defined percentages and succession eligibility. It establishes spousal entitlements and the distribution of the estate, emphasising favouring spouses and children.

The main rules for the distribution of assets for intestacy cases in NSW:

  • Your spouse is entitled to the whole estate and has priority over other surviving relatives (Even if the deceased had children with their current spouse, the spouse would still inherit the whole estate.)
  • Suppose there are children from a previous relationship. In that case, your current surviving spouse is entitled to your personal effects, a statutory legacy (financial gift), and half of your estate split equally with the children.
  • If there are only children and no spouse, they are entitled to an equal share of the property.
  • Other surviving relatives are entitled to equal shares of your estate if there are no surviving children or spouses.
  • If there are no family members who are eligible, then the estate will become the property of the New South Wales government.

The NSW law also states that any relative entitled to a portion of the estate will need to have survived the deceased by at least 30 days.

Intestacy For Indigenous Australians

The intestacy rules can be unsuitable and have limitations for some cultural groups, particularly for an indigenous Australian. Specifically due to the lack of recognition of informally adopted children, of which there are many in aboriginal communities throughout Australia.

Recent changes to the New South Wales laws state that indigenous Australians who wish to have their assets distributed as per their community customs and traditions can apply to the Supreme Court to override the intestacy rules.

Who Deals With Intestate Estates?

When a person dies intestate, the Supreme court will grant letters of administration. There is no executor to manage the estate, and letters of administration will allow an administrator to distribute the deceased’s assets. Banks and government departments will not release assets until they have sighted the letters of administration document.

In some cases where the asset pool is of a low value, or most assets are jointly owned, you may not require letters of administration to release assets.

To be eligible to administer an intestate estate, you will generally need to be one of the family members entitled to inherit from the estate. In most cases, which is usually the deceased’s spouse or de facto partner or next of kin. In Australia, the next of kin is a living relative over 18 years of age, and the definition can vary depending on which state or territory you reside.

Your application to the Supreme Court for letters of administration should be made within six months after death.

When there is no other eligible relative available, the court can appoint a trustee that they deem appropriate.

You should consult with a legal expert who can provide accurate and relevant information specific to your location and situation.

Who is Considered A Spouse?

When a person has died intestate in NSW, the spouse is entitled to all of the deceased’s estate, so it is crucial to understand the correct definition of “spouse.”

A spouse can include anyone who was:

  • Legally married husband or wife
  • De facto relationship
  • Civil partner
  • Registered partnership
  • Separated but not divorced partner
  • Multiple spouses

To be classified as a legitimate de facto spouse, the relationship must have produced a child or lasted at least two years.

A domestic partnership can include a de facto relationship or a registered relationship. To define a genuine domestic relationship, the court may also look at the length of the relationship, living arrangements, financial independence, shared responsibility and childcare.

The act now recognises multiple spouses. For example, the deceased may have been married and have a de facto partner. The partner may also be of the same or opposite sex.

If the deceased had only one spouse and owned property together in joint names, then the surviving spouse would be entitled to the real estate property without letters of administration.

What Happens If There Is No Spouse?

If there is no spouse, then the order of succession states that other relatives may inherit the estate of the deceased.

What Is The Order Of Administration For The Intestate Estate?

The relationship to the deceased determines the order of administration of the assets. The rules of intestacy specify the order of who can inherit the estate. The legislated order of succession dictates that the spouse is always the first option, followed by the children, and if there is no spouse or child, then the deceased’s parents will be eligible. The siblings, nephews, nieces, grandparents, aunts or uncles and cousins are next in line.

If there are no living next of kin, the estate is passed onto the state.

The government or state will only manage and deem a property unclaimed when there are no surviving eligible relatives / next of kin.

What Is The Definition Of Issue?

Other than a spouse, there is another beneficiary of an intestate estate. Legally they are called the “issue of the deceased,” issue refers to the biological and adopted children, including children conceived through IVF and adopted children of same sex couples.

As per succession law, the children have the same rights and are entitled to inherit equal portions of the estate. A biological child may need to provide the court with paternity evidence.

You should seek expert legal advice from a lawyer specialising in estate planning for guidance when intestacy occurs.

How Can You Avoid Dying Intestate?

The benefit of having a valid will is that you can help ensure that your assets are managed as per your wishes in the event of your death. When you die intestate in NSW, you have no control over who inherits your estate. Your whole estate will be distributed as per state law. Ensuring that you have an up to date will lessen the burden on your loved ones after you have passed, as they will be provided with clear instructions of your preferences and wishes. You should follow the correct legal process when drawing up your will to make sure that it remains valid in the event of your death.

How Can A Will Become Invalid?

A will is a legal document and, as such, must be deemed valid before assets can be distributed to beneficiaries. An invalid will can occur in several circumstances, including:

  • If it is not signed or legally witnessed
  • If the will fails to effectively dispose of the assets
  • If the person making the will did not have the mental capacity
  • If a will was poorly drafted or did not follow the correct legal rules of construction

In cases where only parts of the will are valid, it will become partially intestate. This can occur when a will is outdated and does not account for all current assets.

An invalid will means that the estate will subsequently be managed under the rules of intestacy.

Summary

Intestacy occurs when a person dies in NSW without a will, the estate is distributed by an authorised administrator appointed by the Supreme Court of NSW. When a person has died intestate, the Supreme Court will grant letters of administration. To be eligible to administer an intestate estate, you will generally need to be one of the family members entitled to inherit from the estate. Application to the Supreme Court for letters of administration should be made within six months after death.

The Intestacy laws in NSW are set out as per the 2006 Succession Act, which defines relevant legislation to administer an estate when there is no will. The act includes an inheritance formula that sets out how assets are distributed with specific details regarding defined percentages and succession eligibility. Intestacy laws clearly define spousal entitlements, how the estate is to be distributed favouring spouses and children.

In NSW, when a person has died intestate, the spouse is entitled to all of the deceased’s estate, so it is crucial to understand the correct definition of “spouse.”

The legislated order of succession dictates that the spouse is always the first option, followed by the children, and if there is no surviving spouse or child, then the deceased’s parents will be eligible. The siblings, nephews, nieces, grandparents, aunts or uncles and cousins are next in line. The government or state will only manage and deem a property unclaimed when there are no surviving eligible relatives / next of kin.

Ensuring that your will is valid will lessen the burden on your loved ones after you have passed, as they will be provided with clear instructions of your preferences and wishes. In the event of your death, your assets can be distributed in accordance with your wishes.

Obtain professional advice from a lawyer specialising in estate planning for guidance when dealing with intestacy matters.

What Are The Rules Of Intestacy?

The rules of intestacy are a legal guide that determines who will receive your assets in the event of your death. In Australia, each territory and state has its own rules determining who is next of kin and what portions of the deceased estate they are entitled to.

The first rule of intestacy states that your spouse is entitled to your entire estate and has priority over other surviving relatives. It also clearly defines beneficiary entitlements, specifically, how the estate is distributed favouring spouses and children.

The NSW law also states that any relative entitled to a portion of the estate will need to have survived the deceased by at least 30 days.

What Happens When Someone Dies Intestate In NSW?

When dying intestate in NSW without a will, the estate is distributed by an authorised administrator appointed by the Supreme Court of NSW. They will grant letters of administration. There is no executor to manage the estate, and in most cases, a close family member will administer the estate. The letters of administration will allow the distribution of the deceased’s assets. Application to the Supreme Court for letters of administration should be made within six months after death.

If there are no living next of kin, then the estate is passed onto the state government.

The government or state will only manage and deem a property unclaimed when there are no surviving eligible relatives / next of kin.

If a person is an indigenous Australian, the Supreme Court may override the intestacy rules and judge by following aboriginal customs and traditions.

Who Is An Intestate Beneficiary?

In NSW, the spouse is entitled to the whole estate of the deceased. In the case when there is no spouse, then the order of succession states that other eligible relatives may inherit the estate of the dead. The legislated order of succession intestacy rules dictates that the spouse is always the first option, followed by the children. If there is no surviving spouse or child, the deceased’s parents will be eligible. The siblings, nephews, nieces, grandparents, aunts or uncles, and cousins are next in line.

In the circumstances where there are no next of kin or other relatives, then the estate is passed onto the state government.

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