Estate planning is a crucial aspect of securing your assets and ensuring your loved ones are provided for after your passing. Yet, many South Australians underestimate its significance. So, what are the potential consequences of not making a Will?
If a person dies without a valid Will, they have died ‘intestate’ and their estate will be distributed in accordance with the rules of intestacy. The
Administration and Probate Act 1919 (SA) dictates how your estate is to be distributed. So, without a Will, you have no control or say over who receives your assets.
In South Australia, if you leave behind a spouse/domestic partner but no children, your spouse will receive your entire estate. However, if you have both a spouse/domestic partner and children, your spouse/domestic partner will receive the first $100,000, and the remainder will be divided among your spouse/domestic partner and children.
If you do not have a spouse/domestic partner or children, your assets could be distributed to your parents, siblings, or other relatives. The exact distribution varies based on your family situation and size of your estate. Particularly in today’s diverse family structures, stepchildren or foster children may not automatically be considered as beneficiaries under the rules of intestacy. Blended families (where there are children from different relationships) can also lead to disputes over asset distribution.
The distribution of assets without a Will applies to any asset you hold in your sole name, including real estate, financial accounts, shares, personal property and more. Your assets may end up in the hands of individuals you wouldn’t have chosen – you lose the opportunity to specify your true wishes and intentions and the ability to provide for your loved ones or charities that are important to you. For instance, you may hold a property in your sole name and wish to gift it to a loved one. If you do not create a Will setting out this intention, your property will be distributed in accordance with the rules of intestacy mentioned above. Sentimental items may also be distributed based on their monetary value rather than the emotional importance to your loved one. This can lead to disputes and disagreements among family members.
Not only do you risk your assets being distributed against your true wishes, a family member may have to make an application to the Court for Letters of Administration to be appointed as the Administrator to manage your estate. This can be a time-consuming and costly process with legal fees, court expenses and administrative costs eating into your estate. Alternatively, the Public Trustee may become involved in the estate administration and charge their fees accordingly which comes out of your estate.
While death is an inevitable part of life and we cannot control when or how it will happen, we can take steps to ensure our assets are handled according to our wishes after we pass away. An essential tool for this is creating a Will. A Will sets out your wishes regarding the distribution of your assets after you pass away. It ensures that your assets are safeguarded for the benefit of your chosen beneficiaries. To avoid the above-mentioned issues and ensure your assets are handled as you intend, its important that you consider engaging a lawyer who specialises in estate planning.
Losing a loved one is never easy and dealing with their estate can be overwhelming. So, don’t leave the fate of your estate to chance.
For advice or assistance with a Will, contact Lauren Chalmers of
Stanley & Co Lawyers on 08 7001 6135