Intestacy Law in NSW

Intestacy Law in New South Wales – What you need to know and do

A person who dies without a will or an invalid will is said to have died intestate. New Intestacy laws came into effect in New South Wales on 1 March 2010 under the Succession Amendment (Intestacy) Act 2009. The new laws endeavour to reflect community standards and expectations relating to the asset distribution process when a person dies without a valid will.

Too often in peoples busy lives they do not consider how others are going to manage their estate after their passing. It is essential that those wanting to manage the distribution of their estate after their passing have a valid and up to date Will. This will ensure that the deceased wishes as to how the estate will be split up are decided by you and not left to the law.

Where an intestate dies leaving a spouse and children of that relationship, the entire estate passes to the spouse. It is anticipated that in such case the intestate’s children will inherit from the spouse in due course, which may or may not be the case. In particular,  where the surviving spouse forms a new relationship.

The preceding does not apply where the intestate dies leaving a spouse and children from another relationship. The law anticipates that such children may not  inherit from the intestate’s spouse. In such an event the spouse will receive a statutory legacy of $350,000 (increased in accordance with changes in CPI), the intestate’s personal effects and half of the residual of the estate. The intestate’s children share equally in the remaining half of the residual of the estate.

Where the intestate dies leaving multiple spouses, most commonly a married partner and a de-facto relationship, the estate is to be shared between the spouses by way of a distribution agreement or distribution orders by the court. When an application is made to the court for a distribution order, the court will distribute the estate between the spouses as it deems just and equitable. This may provide a variety of mixes from one spouse receiving the whole estate or a split of some form.

The Intestacy Laws set an order for the distribution among the family of the intestate which have been broadened to include cousins. The order in which distribution occurs is: spouse and children, parents, siblings, nieces and nephews, grandparents, aunts and uncles and cousins. In the event that no family members survive, the whole estate will pass to the Crown.

The Intestacy law provides that the personal representative of an Indigenous estate, or a person claiming to be entitled to share in the intestates estate can apply to the court for a distribution order that takes into account entitlement under those laws, customs, traditions and practices. If no application is made, the estate will be distributed according to the general intestacy law.

Changes to intestacy laws have been driven by Australia’s changing social dynamics which has seen high divorce rates, second marriages and the prevalence of de-facto relationships in which a complex family environment is created. The changes give rise to the possibility that your estate will not be distributed in an approach that you would otherwise desire.

The Solution

In order that your estate is divided in the manner you wish, and not by Intestacy Law, it is essential that you have a valid and up-to-date will. You should contact your legal advisor now to ensure that your will is correctly prepared and signed and also contact your financial planner to put in place the appropriate estate planning.

Do not leave problems for your spouse and children to deal with after your death. Make a valid will now!

Author: Christopher Moujalli

Readers should not act or rely on this information without first seeking out professional advice concerning their particular circumstances