In Western Australia if you die without leaving a valid will your estate will be distributed according to legislation, this being the Administration Act 1903. This means that the law decides who your beneficiaries are and how your estate is divided with minimal flexibility.
Intestacy is the term given when a person dies without leaving a valid will.
Any person over the age of 18 who is entitled to a share of the estate can apply to be the administrator of the estate. The administrator of the estate is in charge of paying individual debts and allocating the deceased estates assets to beneficiaries.
The estate first pays off any debts owed by the deceased individual before death, this occurs regardless if a will is in place or not. After the debts are paid, the assets are divided between the spouse and children as per below:
- If the deceased estate assets are valued at less than $50,000 the spouse receives it all.
- If the deceased estate assets are valued at more than $50,000, the spouse receives the first $50,000 and 1/3rd of the remaining. The remaining 2/3rd is split between all children.
If the deceased has no children at the time of death the distribution of assets changes:
- Spouse receives all household chattels, the first $75,000 of assets and 1/2 of the remaining assets. The other 1/2 is split as follows:
- Parents receive the next $6,000 of assets and 1/2 of the remaining balance.
- Siblings receive the remaining balance.
The asset allocation splitting as seen above does not give much flexibility to the administrator of the estate. Especially in the case where an individual with family disputes and multiple families might want to look after specific beneficiaries and not want particular family members receiving any assets. Therefore, it is very important for individuals to make sure they have a valid will to ensure they are happy with their estate asset allocation.
Individuals should not only have a will but also update their will when family circumstances change, like a divorce or having children.
Other related blogs:
Due you need a binding death benefit nomination?
What is an enduring power of attorney?
Author: Rhys Frewin
Email: rhys@faj.com.au
