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 an appropriate family member, trusted friend or professional to administer your estate (your executor), nominate guardians for young children, determine who will receive your assets and give direction for specific funeral and burial arrangements.

Without a Will, the finalisation (administration) of your estate could be left to somebody you would not wish to involve, and the distribution of your assets will be pre-determined by legislation. This is likely to be more stressful, complex and costly for your loved ones.

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

What Happens to Your Estate When You Die Without a Will in Western Australia?

If you die intestate your assets are distributed according to pre-determined formulae set by legislation in the relevant jurisdiction. Essentially, the rules provide for a specific order of distribution to the deceased person's next of kin, depending on each situation.

In Western Australia, the Administration Act 1903 (WA) provides that:

• A surviving spouse/de facto partner receives the first $705,000 of estate if there are no children. The remaining estate is diided between surviving parents and siblings.

• If there are children, the spouse receives a statutory legacy (currently $472,000) plus 1/3 of the remainder, with 2 or more children sharing the remaining 2/3

• Children share equally if there's no surviving spouse

• De facto partners have essentially the same rights as married spouses under WA intestacy laws.

This distribution is referred to as the rules of intestacy or statutory orders and each jurisdiction has a different process. Importantly, these rules may not consider the wishes of a deceased person nor his or her unique circumstances.

Estate Planning Risks: What Can Go Wrong Without a Will?

The formula set out in legislation attempts to reflect society's expectations as to who should benefit from a person's estate. The problem is however, we all know that most families are not 'standard' - many are blended, and there is often unequal distribution of personal wealth between family members.

Dying intestate in Western Australia may not guarantee a fair or intentional estate distribution (according to the deceased) and may result in undesired consequences, such as:

• family members and/or those important to the deceased completely missing out from an inheritance;

• a disproportionate distribution of assets between family members or the possibility of leaving out more needy beneficiaries;

• a distribution to a family member with whom the deceased shared no significant or meaningful relationship.

Important Benefits of Professional Will Preparation in Western Australia

An executor is the legal personal representative appointed under a Will to oversee administration of the estate. An administrator has a similar role however is appointed by the Court when a person dies intestate. In Western Australia, a grant of letters of administration from the Supreme Court is required to administer an intestate estate.

Generally, the next of kin may apply for this role however this may not be desirable in some circumstances. There are many dynamics within families and sometimes it may be preferable for a third party to be involved in the administration, removing the emotional factor and bringing more impartiality into the role. Only through a Will can a person nominate a specific executor of his or her estate.

It's important to note that superannuation, often a significant asset for Western Australians, generally falls outside your estate and isn't governed by intestacy rules unless specifically directed to the estate through a valid binding death benefit nomination (BDBN).

Finally, the failure to make a Will may forego opportunities for estate assets to be treated more tax effectively or to protect vulnerable beneficiaries. This is usually affected through a testamentary trust, a powerful estate planning tool contained in a Will that comes into effect upon the testator's death.

A properly structured testamentary trust in your WA Will can provide flexibility and control in asset distribution amongst beneficiaries and may assist in protecting assets from third parties and creditors. Assets can be preserved so that they can pass through future generations and the trust can provide for different scenarios.

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

Estate Planning Summary: The Importance of a Valid Will in Western Australia

Having a Will gives you a voice when you die. Your testamentary wishes can be made known, and your beneficiaries identified. Comprehensive estate planning with a qualified Western Australian lawyer can also help provide for more tax-effective distribution of your assets and protect vulnerable beneficiaries.

No matter what your age, health status, or financial circumstances, putting off making a Will just doesn't make sense.

This information is of a general nature only and you should obtain professional advice relevant to your circumstances. If you or someone you know wants more information or needs help or advice, about Will preparation in Western Australia, please contact us on 0421 145 637 or email val@crystallawyers.com.au.