Intestacy laws introduced – do you still need a Will?
Most people know that it is important to draft a Will however not many people fully comprehend the consequences of passing away without a Will. The legal terminology for this situation is “intestacy”, however this may also apply to a person passing away with a Will that does not properly dispose of all of their estate. A recent survey by the NSW Trustee and Guardian shows that 46% of respondents did not have a Will prepared. This is a serious matter and should not be taken lightly. If you pass away without a Will, the risk that you bear is that your assets may not be divided in accordance with your intentions.
Sweeping changes to succession laws in New South Wales have now seen new legislation enacted that specifically deals with the law of intestacy. The Succession Amendment (Intestacy) Act 2009 commenced on 1 March 2010, and deals with people passing away after this date.
The recent changes have made a number of changes to the law, which include:
- Brothers and sisters including siblings of half blood
- Definition of a domestic partnership as being one that has been in existence for a continuous relationship of at least 2 years or resulted in a birth of a child.
- Changes in the formula used to calculate Spouses’ Statutory Legacies
- Preferential Rights of Spouses to acquire property
- Dealing with Multiple Spouses
- Distribution among children and relatives
In general the preference of distribution is, in order:
- Brothers and Sisters
- Aunts and Uncles (and subsequently, first cousins)
- The State
It is important for people to have a Will drafted and executed, even if they do not have many assets. The failure to have a Will can result in the estate being divided in ways that the deceased may not have wanted it t be divided. Serious thought and consideration should be put into estate planning by all individuals.