No Will: Oceanfront apartment lost!!

I was speaking with a client last week about his circumstances – which in his words were very straightforward.  He “didn’t need a Will as his family only consisted of an adult son from a former marriage and his current wife”.  (His wife had no children of her own.)

After checking the ownership structure of his prized $1 million asset, I informed him that if he were to pass away tomorrow, following the death of his wife, his son would not receive a cent from the property.

The most likely outcome would be that the asset would be taken by 2 people from the USA who my client has met once – the siblings of his wife.  Alternatively, if his wife remarried one of his mates at the golf club, the new husband might be the lucky recipient of the asset (& his golf clubs)!

As I have met the son a few times over the years, explaining this outcome would be a rather difficult conversation.

I’m now preparing his Will (& severing a Joint Tenancy) !!

The Law!

When someone dies without a valid Will, or their Will doesn’t deal with all of their estate assets, these assets will be distributed according to a set of rules.  In Queensland, these rules can be found in Schedule 2 of the Succession Act (Qld).  These rules don’t apply to superannuation funds or assets owned by trusts.

Because there are many potential family scenarios when someone passes away, they are divided into 4 categories – however this does not deal with every possible scenario.

What is relevant is the scenario that exists on the day that you pass away.  It can get complicated when there is doubt as to whether you are or are not in a defacto relationship.  Where you a step-parent to former spouse or a defacto partner’s child?

1.  You have a Spouse & Children

The spouse receives:

(1)  $150,000, &

(2)  all the household chattels, &

(3)  one-half of the remaining assets (if one child), or

(4) one-third of the remaining assets  (if more than one child)

If you have more than 1 spouse (eg – a wife and a defacto partner), the above amount will be shared between all the spouses – however there is a process to be followed to determine how much each spouse receives.  (Lawyers earn significant sums when people don’t make a will !)

The Child or Children receive:

If one child:   The child receives one-half of the remaining assets.

If more than one child:  each child receives a share of two-thirds of the remaining assets.

Example: If there are 3 children, they each receive a 2/9 share.

2.  You have a Spouse, but no children

The spouse receives:

Your spouse is entitled to the whole of your estate.

If you have more than 1 spouse (eg – a wife and a defacto partner), the above amount will be shared between all the spouses – however there is a process to be followed to determine how much each spouse receives.

3. You have No Spouse, but you do have Children

The Child or Children receive:

The child or children receive all the assets.

If any child doesn’t survive but had their own children, those grandchildren take their parents share.

4.  You have No Spouse & No Children

4.1   If a parent or both parents

The parent receives all the assets, or if both parents survive, they receive all the assets in equal shares.

4.2   If no parents, but next of kin

The next of kin receive all the assets, in the following order:

o   If any brothers or sisters, they share in all the assets, (but if any brother or sister doesn’t survive but had their own children, those nephews &/or nieces take their parents share);

o   If no brothers & sisters (or nephews & nieces), but one or more grandparents, the grandparent receives all the assets or, both grand-parents receive all the assets in equal shares;

o   If no brothers, sisters, nephews, nieces or grand-parents, but one or more uncles or aunts, they share in all the assets (but if any uncle or aunt doesn’t survive but had their own children, those cousins take their parents share).

4.3   If no parents & no next of kin

The Queensland Government receive all the assets.

Disclaimer: The above is to be considered as general education. This is not advice and it is not to be acted upon without advice from a qualified professional who understands your personal circumstances.

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