The important things in life can be narrowed down to family, health, career and a few prized possessions. The important things in death are exactly the same.
You don't have a Will. Many people don't. You're probably curious about how this affects your family – your children, your spouse. It is likely that you have spent most of your life working and have a house, a nice car, life savings. In your mind, you know exactly who you want to receive the benefit of your estate and believe that it is common sense that everything will pass the way you've always wanted it.
Unfortunately, if you have no Will, you have no say as to how your estate is distributed and to whom.
The common misconception is that if you pass away without a Will, the government will automatically inherit all your possessions. This is not true. Instead, your assets are distributed according to a legal formula, which does not take into account what was in your mind. The formula distributes assets based on the pre-determined hierarchy of family/dependents that you have left behind. Without going into too much detail, some of the rules are as follows:
- If you have a spouse or domestic partner and no children, your spouse or domestic partner inherits everything;
- If you have a spouse and children, the first $100,000 is given to your spouse along with 1/3 of the remainder of your estate, then the remaining 2/3 is distributed equally amongst your children. If your estate is valued at less than $100,000, your spouse receives the entire amount and your children miss out;
- Your spouse may inherit the family home to the exclusion of the children;
- If you die leaving a spouse and a domestic partner (how awkward!), the court will determine the entitlement of each party based on the length of time that you have lived with your domestic partner.
- If you have lived with your domestic partner for less than 4 years, your spouse will receive 2/3 and your domestic partner will receive 1/3 of your estate.
- If you have lived with your domestic partner for 6 years or more, your spouse will not have an entitlement to your estate and your domestic partner will be entitled to 100%.
- If you don't have a spouse or children, the court considers your grandchildren, great-grandchildren, father/mother, brothers/sisters, grandparents, nephews/nieces, uncles/aunts, great-grandparents, remoter next of kin, and only then, if no one remains, does your estate pass to the government.
There are no exceptions to the application of the formula if you don't have a Will.
It doesn't need to be this way and thankfully there are mechanisms that can be implemented into Wills that give them strong enforceability after you pass away. If the focus of your life has been on building up your wealth and relationships so that they continue to survive and reap benefits for your loved ones well after you pass away, then you need a Will. After all, your life and death should be a celebration of the important things.
If you would like to put together a Will, BlueRock would be delighted to assist you. Please contact Marco Saccotelli on +61 3 8658 2032 or firstname.lastname@example.org