Busting the Myth: The Government Doesn’t Take Your Estate if You Die Intestate

One of the most common myths we encounter is the belief that the government will automatically take the entire estate of a person who passes away without a Will (intestate). A further misconception that the process of creating a Will is either unnecessary or too complex and therefore often leads individuals putting off estate planning. The reality is that the law ensures your assets are distributed fairly and reasonably, even if you do not leave a Will.

What Does "Intestate" Mean?

In simple terms, to die "intestate" means to die without a valid Will. When a person dies intestate, the administration of their estate is governed by the laws of succession, which are set out under the Administration and Probate Act 1958 (Vic). Contrary to popular belief, the government does not automatically seize or take possession of the deceased’s assets. Instead, the estate is distributed according to a set of predetermined rules designed to ensure that close family members are the primary beneficiaries.

Who Inherits Your Estate if You Die Intestate?

In the event that you pass away without a Will, your estate will be distributed according to the Intestacy Rules under Victorian law. The distribution depends on a few key factors, such as whether you were married, whether you had children, or if you were in a de facto relationship at the time of your death.

1. If You Are Married or in a De Facto Relationship

If you are married or in a de facto relationship at the time of your death, the surviving spouse or partner will usually be entitled to inherit a portion of your estate. However, the specific share they receive depends on whether you have surviving children.

If you have no children: The surviving spouse or partner will usually inherit your entire estate.

If you have children: The estate is divided between the spouse/partner and the children. The spouse or partner will usually typically receive a larger share, but the remaining portion will be distributed among your children.

2. If You Have Children but No Spouse or Partner

If you are not married or in a de facto relationship and have children, your estate will usually be divided equally among your children. If your children are minors, the estate will be administered on their behalf by a trustee until they reach the legal age of majority (18 years).

3. If You Have No Immediate Family

In the unfortunate event that you pass away without a spouse, de facto partner, or children, the distribution of your estate becomes a bit more complex. The estate may be passed on to other family members, such as:

Parents (if they are still alive)

Siblings (if your parents are no longer living)

Extended family such as grandparents, uncles, or aunts

If there are no surviving family members, your estate may eventually be claimed by the State Government. However, this only happens after a thorough process of attempting to locate any eligible relatives.

Why is Estate Planning Important?

While the intestacy rules are designed to distribute your assets to your closest family members, they are not always aligned with your personal wishes. The intestacy laws may not account for complex family dynamics, such as blended families, estranged relationships, or specific wishes regarding the care of pets, charitable donations, or guardianship of children.

Additionally, if your family situation is complicated, such as having a de facto partner, children from a previous relationship, or stepchildren, the intestacy laws may not provide for them in the way you would want. This can lead to unnecessary conflict or confusion among your family members during an already difficult time.

By having a valid Will, you can:

1. Choose your beneficiaries – Ensure that your estate is distributed according to your specific wishes.

2.Minimise disputes – A Will can help reduce the chances of conflict within your family by clearly outlining your wishes.

3. Appoint a guardian for your children – If you have minor children, a Will allows you to designate a guardian to look after them, rather than leaving this decision to the courts.

4.Manage the distribution of assets – You can establish conditions for how and when your assets are distributed, which is particularly important for those with significant or complex estates.

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