Losing a loved one is incredibly stressful for those left behind. This stress can be compounded when the deceased has not left a Will setting out how they wish their assets to be dealt with. Many people mistakenly believe that when a person dies without a Will, their Estate is paid to the Crown (Government).
When a person dies without leaving any form of testamentary intentions (an intestacy) a formal process must be entered into to enable the appointment of an Administrator, who is then charged with administration of the Estate in accordance with the terms of the Administration Act.
If the Estate is worth over $15,000, or involves real estate or an occupation licence, formal Letters of Administration can be granted to the deceased’s closest family member or the person who stands to benefit most from the Estate. If the deceased did not have any family, or have any family who are willing or able to apply, then an application can be made to the High Court, who can appoint an independent Administrator.
Prior to beginning the process for Letters of Administration, a thorough search of the deceased’s papers must be undertaken to ascertain whether a Will exists. If nothing is uncovered from a search of the deceased’s papers, an advertisement should be placed in the local Law Society branch newsletter searching for a Will. All solicitors check these advertisements, which appear weekly, and search their records to see if the persons named in the advertisement have ever been a client of the firm. The Law Society will advise whether or not a Will has been located within 3 weeks of publication of the advertisement. A paternity search must also be obtained from the Department of Internal Affairs, together with consents from those with a beneficial interest in the Estate.
Once Letters of Administration have been granted, the appointed Administrator must call in all Estate assets, advertise for Creditors, ensure tax matters of the deceased are up to date (if required), and pay any debts of the deceased. A statutory period of 6 months must be enforced that runs from the date of grant of Letters of Administration during which capital distributions should not be made. This 6 month statutory period exists to protect the Administrator from personal liability in the event of a successful claim being made against the Estate.
Distribution of Estate funds in an intestacy must be carried out in accordance with the provisions of s77 of the Administration Act 1969. Funds are only distributed to the Crown in the event that the deceased left no surviving spouse, civil union or de-facto partner, children, parents, siblings or grandparents. The Crown holds the funds “bona vacantia”, and any dependents of the deceased (or other persons for whom the deceased might reasonably have been expected to make provision) may request the Crown to do something with the Estate funds.
Bearing the above in mind, it is far more preferable, and cost effective, to leave a Will setting out your wishes, to ensure that your Estate is distributed to those you hold dear.