Estate Planning Western Australia: The Perils of Dying Intestate Without a Will

A valid Will determines how your estate is dealt with after you die.

Your Will can appoint a family member, trusted friend or professional to administer your estate (your executor), nominate guardians for young children, identify who will receive your assets and record your funeral and burial wishes.

Without a Will, the administration of your estate could fall to somebody you would not choose, and your assets will be distributed according to a fixed legislative formula. This is likely to be more stressful, more complex and more costly for the people you leave behind.

No matter your age, health or financial circumstances, dying without a valid Will in Western Australia is likely to create added stress, legal complications and costs for your family.

What happens to your estate if you die without a Will in Western Australia?

If you die without a Will, your assets are distributed according to the rules of intestacy set out in the Administration Act 1903 (WA). These rules follow a fixed order of distribution to your next of kin, depending on your circumstances.

In Western Australia, the current rules provide that:

• If you have no children, your spouse or de facto partner receives the first $815,500 of your estate. The remainder is divided between your surviving parents and siblings. (This figure is subject to periodic indexation — please confirm the current amount with a solicitor.)

• If you have children, your spouse or de facto partner receives a statutory legacy (currently $546,000, subject to indexation) plus one-third of the remainder. Your children share the remaining two-thirds equally.

• If you have no surviving spouse or de facto partner, your children share the estate equally.

• De facto partners may have similar rights to married spouses under these rules, but there are important differences. You should obtain advice specific to your situation.

These rules attempt to reflect general community expectations, but they cannot account for your individual wishes or your family's circumstances.

What can go wrong without a Will?

Most families are not straightforward. Many are blended, and financial circumstances vary widely between family members.

Dying without a Will in Western Australia may result in:

• family members or important people in your life receiving nothing from your estate;

• a distribution that does not reflect the relative needs of your beneficiaries; or

• assets passing to a family member with whom you had little or no meaningful relationship.

The benefits of having a professionally prepared Will

An executor is the person appointed under your Will to administer your estate. If you die without a Will, the Court appoints an administrator instead. In Western Australia, a grant of letters of administration from the Supreme Court is required before anyone can deal with an intestate estate — this is a formal court order giving the administrator authority to act.

While the next of kin may apply for this role, that is not always desirable. Family dynamics can be complex, and an independent third party can bring impartiality to the process. Only through a valid Will can you choose who administers your estate.

It is also worth noting that superannuation generally falls outside your estate. It is not governed by the intestacy rules unless you have made a valid binding death benefit nomination directing your super to your estate. This is often one of the most significant assets a person holds, so it is worth reviewing your nominations regularly.

A professionally prepared Will can also provide opportunities for more tax-effective distribution of your assets and protection for vulnerable beneficiaries. One way this is achieved is through a testamentary trust — a trust created in your Will that comes into effect when you die. A testamentary trust gives your executor flexibility in how assets are distributed, can help protect assets from creditors and third parties and can allow assets to pass through future generations.

Even with a valid Will, it is worth noting that eligible persons may make a family provision claim under the Family Provision Act 1972 (WA) if they believe they have not received adequate provision from your estate.

Why a valid Will matters

A Will gives you a voice about what happens when you die. It records your wishes, identifies your beneficiaries and can help your family avoid unnecessary cost and conflict.

Putting off making a Will — whatever your age, health or financial circumstances — is a risk that is easy to avoid.

This information is general in nature and does not constitute legal advice. You should obtain advice specific to your circumstances. If you would like to know more, or if you need help preparing a Will in Western Australia, please contact us on 0421 145 637 or at val@crystallawyers.com.au.