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Where there’s a Will there’s a way to ensure that your estate will pass to those you intended. However, if you fail to take steps to have a Will prepared while you are alive then on your death your estate will pass according to a predetermined formula set out in the Succession Act 2006 (NSW) (the Act).

Chapter 4 of the Act outlines the rules of intestacy. A person dies intestate if they die without a Will or if they leave a Will that does not dispose of all or part of his or her property

The rules of intestacy may not provide for your loved ones in the way you would have expected and in some cases the rules of intestacy my see those who you did not intend to benefit from your estate.

Intestacy and de facto partners

If you die without a Will and are in a de facto relationship (and have no children) then your de facto partner will be entitled to the estate.

The de facto relationship must have been in existence for a continuous period of 2 years, or have resulted in the birth of a child. The de facto partner will need to provide evidence to the Supreme Court of NSW to establish that they are a de facto partner. This can cause additional and unnecessary stress and delay to your loved one.

If you leave a de facto partner and have children from a previous relationship then your de facto partner will be entitled to your personal effects, and a statutory legacy (the sum of $350,000 adjusted by CPI) and one half of the remainder (if any) of your estate. The remaining one half of the remainder of the estate (if there is anything left in the estate) will be divided among your children.

This may result in your children receiving a limited or no amount of your estate depending on the assets that you hold at the time of your death.

Hypothetical scenario

Henry Jones owned a property located at Albury in his sole name. Henry had two children from his previous marriage to Shania Love. Five years ago Henry met Paula Hughes. Henry and Paula lived in Henry’s home in Albury. Henry and Paula had agreed that if Henry passed away, Paula could live in his home until she died and then the property would pass to Henry’s two children. Henry and Paula had no children together. Henry also had $100,000.00 in his bank account. Henry died without a Will. At the time of his death the property was worth $200,000.00.

In this scenario, Henry died intestate. Henry’s wishes were that his estate would pass to his children. However, as Henry died without a Will, Paula was entitled to Henry’s personal effects, and a statutory legacy (the sum of $350,000 adjusted by CPI) and one half of the remainder (if any) of the estate. As the value of the estate was less than the amount of the statutory legacy there was nothing left for Henry’s children.

If Henry had a Will prepared he could have looked at the option of providing Paula with a right of residence in his property at Albury giving her the right to live there until her death or entering into another relationship and left the property and his other assets to his children. This is just one of the many options that could have been considered so that Henry could adequately provide for both his de facto partner and his two children.

Lesson to be learned

In the world of de facto relationships and blended families, it is imperative that you have a Will. A Will can be drafted to suit your personal circumstances to ensure your estate passes to those you intend and in the proportions you intend. It is particularly important if you have children from multiple relationships. There are many options that your lawyer can discus with you to tailor a Will to suit your personal circumstances and assets structures.

A Will can also avoid unnecessary stress, costs and delay in your de facto partner having to prove the nature of your relationship to a Court and avoid conflict in your family. By having a Will prepared while you are alive you can have peace of mind that your estate will pass to those you intended.

* Please note this article is a hypothetical scenario and not legal advice. We would need to consider all circumstances of the case to provide proper legal advice.

 

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