Why You Need a Will

This is a question often presented to the estate planning lawyers in our office.

The most obvious answer is that, if there is no will, your estate will be distributed in accordance with the method set out in the Administration and Probate Act 1929 (ACT) (the Act) or the equivalent legislation in the relevant State or Territory. The method set out in the Act is complex and, depending on the value of the estate and who the potential beneficiaries may be, makes provisions for a spouse and children or next of kin if there is no spouse or children. If there is no spouse, children or next of kin and a person dies intestate, the estate will go to the Territory. These distributions may not reflect the wishes of the testator and accordingly if you want your estate left in a particular way then you should make a will to reflect your wishes.

The other aspect of dying without a will is the possibility of the estate being significantly dissipated as a result of litigation. There are many examples of litigation relating to estates and specifically to a person dying intestate for example:

  • disputes between potential beneficiaries
  • disputes between potential administrators of the estate
  • dispute about the existence of informal wills
  • seeking alternate orders under the Act.

As an example, in the South Australian matter of the Estate of David John Loy (Deceased) [2012] SASC 140 there was no dispute relating to the estate; however the estate did have to bear the costs of making an application to the Supreme Court in relation to the distribution of the estate under the Administration and Probate Act 1919 (SA) (the SA Act). In this case, the deceased died without making a will, leaving a wife and two daughters. The wife successfully made an application for administration of the estate. Pursuant to the SA Act, the wife was entitled to the first $100,000 of the estate plus half of the balance, with the other half divided equally between the two daughters. Whilst this seems relatively straightforward, the situation was complicated by the fact that the daughters were minors at the time. As minors, the SA Act required the daughter’s share of the estate to be transferred to the Public Trustee of SA, to be held on trust for the daughters until they turned 18.

The wife sought an order under the SA Act to have her daughters’ share of the estate transferred to her to be held on trust for the daughters until they turned 18, on the basis that she would be in a better position to decide how best to use the funds in the estate for the benefit of the daughters. The South Australian Supreme Court ultimately agreed with this approach and granted an order to the wife and her brother to act as trustees of the daughters’ share of the estate. Whilst there was no dispute in this matter, the estate ultimately had to bear the cost of the wife’s application. Had there been a valid will, this situation could have been avoided.

The message is clear, if you want to retain control over how your estate is distributed and provide your estate with the best protection against incurring significant costs, you must make a valid will.

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