It is never easy to start thinking about what will happen to your loved ones when you are no longer around. The reality is that countless people pass away every day in Australia without leaving a Will – but failing to set out plans for your estate can have serious consequences for those that you leave behind. In this article, we take a closer look at the legal, financial, and personal implications of not having a Will – and why it’s never too early to think about preparing for the future.
Without a Will, you have no control over the distribution of your estate
Passing away without leaving a Will behind is referred to as dying “intestate”. This means that, instead of your estate being distributed according to your wishes (or, indeed, to those of your loved ones), it will be distributed in line with state legislation. Because the law follows a set formula, this completely removes your control over where your assets end up.
Intestacy rules may not reflect your wishes
Intestacy rules are designed to distribute an estate as fairly as possible in the absence of a Will – beginning with your next of kin. However, because the rules adhere to a fixed sequence, they may not cater appropriately to the nuances of your situation. For example, they will not take account of the needs of particular family members who might require greater provision than others. Neither will they provide for distant family members, friends or causes that you may have wished to support.
Your loved ones may be forced to sell the family home to cover estate entitlements
The intestacy rules require an estate to be distributed in strict proportions according to the law. Unfortunately, this can often result in complicated divisions which cannot be achieved without selling the assets in question. For example, if the majority of the estate is made up of a family home, and multiple beneficiaries are entitled to a share, the only way to ensure that everyone receives their entitlement is often to sell the property and split the proceeds. This can lead to disputes and major financial stress for everyone involved.
You could lose control over who takes over guardianship of your children
One of the most critical reasons to have a Will in place is to protect any children that you leave behind. If you are unfortunate enough to pass away whilst any of your children are still under the age of 18, a guardianship clause in your Will is an essential lifeline to ensure that they are left in the care of someone that you know and trust. In the absence of any guardianship wishes, the courts will make this decision on your behalf – a choice which may not always be in line with your intentions.
Your children or grandchildren may not receive the financial protection you intend
Another significant disadvantage of not having a Will is that your children, grandchildren or other family members may not receive the financial protection that you would have wanted them to. At best, leaving no guidance behind can result in confusion as to who is entitled to what – and at worst, can result in costly and emotionally taxing disputes between loved ones after your death.
Partners, stepchildren, friends and charities may miss out
Under intestacy rules, your estate is distributed amongst your next of kin by order of priority. This will usually include your spouse, children, parents and siblings – and can leave others out in the cold. If you have a partner to whom you have never been married, they are not likely to receive anything from your estate. Equally, many people choose to leave a legacy to friends and charitable causes, neither of which are included under the intestacy process. Leaving things to “default” can result in financial consequences for those who you would otherwise have chosen to support.
Incapacitated members of your family may have their assets put at risk
If you have dependents who are unable to manage their own finances due to physical or mental incapacity, failing to leave a Will behind can leave them vulnerable. In the absence of clear instructions for the management of their assets and care, the Court will step in to appoint a guardian to do this on your behalf. The appointed guardian may have a different perspective to yourself or your family members on how the assets should be managed, which can quickly lead to conflict.
Your estate may be administered by someone you would not appoint
When you make a Will, it is normal to appoint somebody to act as the executor of your estate when you pass away. This could be a trusted family member, friend, or even a professional who understands your personal values and priorities. However, if you die intestate, the Court will appoint an independent administrator to distribute your estate according to the law. Not only can this lead to disputes between beneficiaries, the impersonal nature of this process can be distressing for your loved ones.
When to seek advice
Taking control of your future doesn’t have to be a complex or expensive exercise – and it is never too early to start thinking about making plans. The process of preparing a Will can be surprisingly simple and straightforward – and provides invaluable peace of mind for both yourself and your loved ones when you are no longer around.
For a confidential discussion, contact the Madison Branson Wills and Estates team today.
The information provided in this article does not, and is not intended to, constitute legal advice; instead, all information is for general informational purposes only.