In Western Australia, if you die without leaving a will (known as dying ‘intestate’), your estate will be distributed in accordance with the provisions of a statutory formula which is set out in section 14 of the Administration Act 1903 (WA) (Administration Act. Learn more about what a will is and whether you need a will).
Section 14 of the Administration Act was last amended in 1982 the effect of which has resulted in some reasonably oppressive results, particularly for surviving spouses. For example, under the current formula for the distribution of a person’s estate dying intestate:
- a surviving spouse or de facto partner is entitled to the household chattels, the first $50,000 of the estate and one-third of the balance of the estate and any children will equally share the remaining two-thirds of the estate; and
- if a person dies without leaving children, a surviving partner will be entitled to the first $75,000 of the estate and one-half of the balance, with the remaining half of the estate distributed amongst the parents and siblings of the deceased.
In the absence of agreement, it is not uncommon for surviving spouses to be forced to dispose of estate assets including the family home to comply with the provisions of section 14 of the Administration Act.
Even with the agreement, in circumstances where children and other family members renounce any rights to benefit under the Administration Act, the surviving spouse may incur significant taxes, such as transfer duty, and other fees, that would not have been incurred if the Deceased had left a valid will.
On 27 June 2018, the Administration Amendment Bill 2018 was introduced into State Parliament to reform the Western Australian (WA) intestacy laws set out in the Administration Act. These proposed changes will have a significant effect on what happens to a person’s estate if they die without a will.
The Administration Amendment Bill 2018, as presently drafted, will increase the current amounts of the statutory legacies payable on intestacy which are now, as set out above, grossly inadequate. It will also provide a formula for calculating the amount of the statutory legacies in the future.
The Bill aims to remove financial hardship for the surviving spouse or de facto partner and tries to ensure that he or she can live in the manner to which he or she had become accustomed prior to the intestate’s death.
The bill proposes to amend section 14 of the Administration Act to set the amount of the partner’s statutory legacy at $435,000 when the intestate dies leaving children, and $650,000 when there are no children. This is in line with current market values for real estate in this State.
It is not clear when the changes to the Administration Act are going to come into effect.
In any event, it outlines the importance of a carefully drafted will. Losing a loved one is undoubtedly traumatic at the best of times. Ensuring your loved ones are adequately provided for upon your death is one simple step that can be taken to lessen the burden.
The experienced estate planning lawyers at HFM Legal regularly assist clients with the preparation of their wills and all other aspects of their estate planning such as enduring powers of attorney, will disputes, enduring powers of guardianship, superannuation nominations, and advanced health directives. You can contact one of our experienced wills and estate planning lawyers today.