Find out what happens and what you need to do in VIC, if there’s no last will and testament.
If someone dies without leaving a will, or if their will leaves some possessions unaccounted for, then they have died intestate.
When this happens, there are laws in place, with a clear order of operations for inheritance, to make sure descendants and partners can get the assets to which they are entitled.
This guide explains intestacy in Victoria and what happens if someone dies without a will.
The following information is current as of April 2017, but intestacy reforms are being proposed in Victoria, and the accuracy of the information may be subject to the passage of legislation. It’s generally a good idea to consult a professional for help managing intestacy.
The first people who get taken care of, both by a will and by intestate assets, are creditors. All debts need to be repaid including the following:
- Funeral expenses
- Debts to any financial institutions or other lenders
- Any outstanding administrative or legal expenses
After this, any assets listed in a will are distributed as specified. Anything not mentioned in a will is then distributed according to the intestate laws.
The division of assets goes through a number of levels, starting with the spouse and ending up with distant relatives. The estate administrator needs to run down the list from top to bottom and locate any surviving relatives. If no relatives can be located or they all are deceased at one level, then the administrator moves down to the next level.
- Spouse and partners
- Children, grandchildren
- Aunts, uncles, great-grandparents, nieces and nephews
- First cousins, great nieces and great nephews
- First cousins once removed
- Second cousins
- Any other family
- The state government
Spouse and partners
- Just a spouse or partner. If there is only one spouse or partner, then that partner inherits everything unless the deceased has children.
- Plus children. If there is one eligible partner and the deceased also has children with a different partner, then the eligible partner can inherit all personal property and $100,000. The children inherit a cut of the remaining amount, ranging from two-thirds to none, depending on how long the eligible partner has been in a domestic relationship with the deceased.
There also might be multiple eligible partners. For example, if the deceased had a spouse but never formally divorced then went on to live with a new de-facto partner but never got remarried, there will be multiple eligible partners
|How long the de-facto partner has been a domestic partner||Spouse’s inheritance||Domestic partner’s inheritance|
|Less than 4 years||Two thirds||One third|
|5-6 years||One third||Two thirds|
These rules only apply when there’s an eligible spouse or de-facto partner. If there isn’t, the division of assets moves on to children and grandchildren.
Note that for deaths which occurred prior to 8 November 2001, the only thing that qualifies one as a partner or spouse is legal marriage.
Children and grandchildren
Generally, all eligible children will divide the assets in equal shares. If there are no children, then any grandchildren will divide the assets equally.
The exception is if any of the deceased’s children have also passed away after having children of their own (grandchildren). Here, these grandchildren will receive the same amount that their parents would have received, divided equally among themselves.
These rules run on down the family tree to any great-great grandchildren as far as it can go.
If there are no children, grandchildren or anyone else to inherit, then the deceased’s parents are next in line.
The deceased’s assets are divided evenly among all parents.
If the deceased has no surviving partners or spouses, no children, grandchildren or other direct descendants and no surviving parents, then the assets pass on to the deceased’s siblings.
Here, all siblings receive an equal share. In the event of one sibling having passed away but leaving children of their own, then those children are entitled to the share their parents may have received.
In other words, the deceased’s nieces or nephews might get a share at this level if their parents would have been entitled to one.
Any surviving grandparents are entitled to inherit next, if none of the above applies.
Aunts, uncles, great-grandparents, nieces and nephews
All of these are in the same level and are entitled to an equal share where applicable.
First cousins, great nieces and great nephews
Everyone on this level gets equal shares.
First cousins once removed
This refers to the children of first cousins and the cousins of parents. Each first cousin gets an equal share.
Second cousins get equal shares if the distribution of assets gets to this level.
Any other relatives
Once intestate assets reach this last level, it’s essentially a search for any other remaining family members.
The state government
If no other family members can be located, then the state can inherit it all.
In order to properly distribute assets, someone needs to be appointed as an estate administrator. This person is responsible for making sure the estate is distributed correctly in line with the rules set out above.
Before they can start, this estate administrator will need to apply for a grant of administration from the courts. This is essentially a notice which lets them withdraw the deceased’s funds from banks, pay back creditors on their behalf and otherwise manage the finances as needed.
In order to get a grant of administration, you will need to prove that you have satisfied all of the following steps.
- Conduct a thorough search for a will. You still need to do this even if the deceased has said there isn’t one. Check all their papers, check with their bank, any solicitors or accountants they might have used and any likely trustee companies. You should also publicise your search.
- Get certificates. You will need to get a death certificate. You may also need to get certification of your relationship to the deceased in order to succeed in your application.
- Lay out who is entitled to what. Your application needs to specify who is entitled to a share of the assets under intestate law. Generally, everyone mentioned here may be entitled to apply for a letter of administration, and they can agree between themselves who should apply for a grant.
- Advertise your intention to apply and wait. You now need to advertise your intention to apply for a grant of administration on the state registry. Then you will need to wait at least two weeks. This is so other people with an interest in the estate, like creditors, other eligible relatives or someone who might know of the existence of a will, can have a chance to get involved.
- File the paperwork. Once you’ve completed all the above steps, you can file an application for a letter of administration. The things you need to include in an application and the forms to fill out may vary depending on the situation.
Guarantees required of the estate administrator
In some situations, the administrator will also need to lodge a bond or prove that they have taken out insurance, when requested, against the chance of them not performing their duties or stealing any of the assets.
If you hire a lawyer to do this check on your behalf, they will be required to either lodge a bond or take out insurance in case of any wrongdoing on their part. This guarantees that even if they do prove to be dishonest, you are still entitled to the full amount.
The following people will need this type of guarantee:
- Creditors of the deceased who may want to take control of asset distribution.
- A person who is not in line to inherit and has no clear reason to get involved.
- An attorney hired by someone who might be in line to inherit.
- A minor or someone who otherwise may not be capable of managing the affairs appropriately.
- Someone who doesn’t live in the state of Victoria.
- Where there are any other specific or unusual situations where the courts may require it.