26/06/2009

Intestacy law in NSW will change soon as part of the process to bring all state succession laws in Australia into line.

The changes take account of several surveys that showed that 75% of people who have a Will leave everything to their spouse, and 54% of people don’t have a Will.

Both these stats are disturbing.  The large number of people who leave everything to their spouse do so because they have not been better informed on the alternatives that could lead to much better outcomes for their estate.

Likewise the relatively huge number of people who don’t have a Will have not received good advice about how to better plan for their last ever Grand Final.

The existing law of intestacy in NSW gives the spouse the whole of the estate up to a certain monetary limit and divides the rest equally between the then current spouse on the one hand and the kids on the other.  The new law gives the whole of the estate to the spouse.  The definition of spouse has been broadened in line with existing State and Federal law to include anyone with whom the deceased was living in a domestic relationship.

If the deceased has children by a prior marriage, then the existing spouse receives the deceased’s personal effects, a statutory legacy (initially $350,000, adjusted annually for CPI) and one half of the rest (if any).  The children of the prior marriage receive the other half.  The children of the existing marriage get nothing as they are expected to benefit from the estate of their surviving parent (ie the existing spouse).

If the intestate deceased leaves no spouse then the children of the deceased receive the estate in equal shares regardless of which spouse they were born to.  If a child of the deceased has pre-deceased them leaving children then that child’s share is divided among those grandchildren.

If the deceased leaves no spouse or children then their estate goes to their parents.  If they have no parents then the estate goes to the brothers and sisters of the deceased in equal shares.  If a brother or sister pre-deceases the deceased and leaves children then that brother or sister’s share is divided among those nieces and nephews.

Previously cousins of the deceased weren’t eligible to receive anything but now, if there is no-one else, the cousins can share the estate.  Indigenous people have their own set of rules that are completely different.

If there are not eligible applicants then the estate goes to the State of NSW although the State can waive its entitlement in favour of one or more of a wide range of claimants, including an organisation for whom the deceased might have been expected to have made a provision.

Do you have a Will?  Are you an adviser who should remind their clients of the need to have a Will? TOWNSENDS BUSINESS & CORPORATE LAWYERS can help with all your estate planning needs, contact us on (02) 8296 6222.