Intestate Succession: How to Administer the Estate?

In matters of succession, the importance of having a valid Will is much greater than we can emphasise. It practically decides the course of the estate distribution even though the Will-maker is no longer alive. 

However, there are certain situations where there is no WIll. The owner of the estate either dies without writing a Will or the Will proves to be invalid. In that case, the estate is considered intestate, and the factors determining succession change entirely. 

How is it administered, and what should you know about it? We will discuss everything in this article, so read until the very end. 

No Uniform Succession Act

In Australia, there is no one intestate succession act. Each state or territory has a different approach to succession in the case of intestate. Thus, it is incredibly important to seek legal counsel from a solicitor. 

The executor of an intestate estate must abide by all applicable regulations that are in effect in the state or territory. For example, Queensland succession and intestacy laws comprise Succession Act 1981 and Trusts Act 1973. 

Reasons for not having Beneficiaries

The absence of a will is the most frequent cause of no beneficiary. There are yet other routes to leave your inheritance without beneficiaries. 

• A legitimate will exists, but the designated beneficiary has passed away. 
• Despite naming a beneficiary, the Will became invalid. 
• The super or life insurance account has a beneficiary listed, but the beneficiary passed away. 

Distribution of Intestate Estates

In general, the relationship to the dead individual determines the administration sequence of an estate. It can happen in any sequence, depending on the state or territory: 

• The spouse or de facto partner 
• Children 
• Parents in the absence of a surviving spouse or children 
• If there are no other surviving family members, then grandparents, siblings, aunts, or uncles.

Smaller estates often pass wholly to the surviving spouse, whereas larger estates need sharing. Additionally, there are many asset classes with various distribution needs. For instance, a spouse often inherits personal items and furniture. 

In rare circumstances, irrespective of the size of the decedent’s inheritance, a spouse may also receive the marital home, whether or not they are joint tenants. The assets of the estate would be distributed to other close relatives if the deceased had neither a spouse nor children. 

If there is no surviving family, the state will get the whole estate after paying any debts and last expenditures.

Regulations on Debt in Intestate Estates 

Every estate will have certain liabilities to pay off, along with the assets to inherit. Typically, debts are to be paid off first, with or without a Will. 

The process for paying debts out of the intestate estate depends on each state’s succession laws. First, tax bills and secured debts need settlement if the estate does not have enough assets to pay off all debts. 

A creditor may even file a bankruptcy petition on behalf of the estate if it’s impossible to pay off all obligations.

Need for Probate

There is now a method to decide who will get the estate’s assets, Will or no Will. However, you might need to petition for Probate before dividing the estate. Only when there is a legitimate Will with a designated executor do you need to apply for a grant of probate. 

The Probate grant is an order from the Supreme Court designating the executor as the person in charge of managing the estate of the decedent. 

You must submit an application for Letters of Administration if there is no Will or if there is a Will but there is no executor. For better understanding, you may seek a solicitor, and they will tell you all about Probate in SA. 

Anti-Lapse Rule

There are two situations to consider here. One is where there is no Will, and the second is when there is a Will but the sole beneficiary passed away. These should be considered as two separate situations and dealt with differently. 

In the first instance, the Court is unsure of the potential wishes of the deceased. The intestate succession then takes control. 

In the second case, the Court is aware of the deceased’s preferences, but the beneficiary’s passing prevents them from being fulfilled. You may fix this problem in some states by applying the anti-lapse rule. This rule ensures that the inheritance goes to the dead person’s heirs.

Additional Laws Regulating Intestate Estates 

Other laws, apart from succession law, are especially important to the estates of the deceased. Examples:

• Rules managing child support accrual and arrears collection
• Laws governing bankruptcy 
• Payback of obligations to the Commonwealth, including HELP-HECs.
• Laws governing federal tax payment

Tax law is also significant since one of the administrator’s primary responsibilities is likely to be filing the decedent’s last individual tax return. In specific circumstances, it may be necessary to file a trust tax return every year until the end of estate administration. 

An executor or administrator might seek the assistance of a lawyer to manage the legal requirements. 

Final Say

This is how you deal with an intestate estate in Australia. Intestate estates certainly take a different approach than when there is a valid Will. It can be simple in certain circumstances and become complex in other situations.

Therefore, you definitely need the help of an experienced and skilled solicitor to help you with the procedure. Probate Consultants has been successfully handling many Probate and intestate estates. You can book a call with them and seek advice for your particular situation. They can answer any questions you may have, from QLD Probate to contesting a Will. 

If you have any follow-up questions regarding intestacy laws, feel free to comment. We’ll help you with it!