Many people think that dealing with their Estate will be a relatively easy and straightforward process and they do not see the need to consult a solicitor to make a Will.
This blog could simply explain that in Queensland if a person dies without having made a Will the rules of intestacy will apply and go on to explain how the rules of intestacy work.
However, this approach can mislead people into believing that everything will be okay and they don’t need to make a Will.
We thought it would be instructive to share some examples of the complex and unexpected outcomes we have seen in a few of our files in recent times to help you appreciate why it is so important to see a solicitor to make a Will.
This is not just about the fact that the rules of intestacy may not produce an outcome consistent with your wishes for your property on your death. The bigger issue is the problems you can leave behind for those who have to deal with your Estate.
Example 1 – A small intestate estate and a missing beneficiary
A widowed father of ten adult children passed away leaving no assets other than $19,000 in a bank account and personal possessions. He had never made a Will. The rules of intestacy provide that his estate should be divided in 10 equal shares between his children.
The bank will not release the funds unless:
- Someone obtains a Grant of Letters of Administration from the Supreme Court; or
- All of the children sign a Release of Funds form.
Unfortunately, there is one child that no one in the family has had any contact with for over thirty years. They are unable to locate him despite all reasonable enquiries amongst the family, phone records, electoral roll and with the registry of births, deaths and marriages.
If the missing beneficiary is found, all of the children can sign the Release form, claim the funds from the bank and distribute the funds equally.
If the missing beneficiary cannot be found, all of the options for the remaining children are complex and costly. They include:
- Engage a private investigator or missing heir’s service – this may or may not result in locating the missing beneficiary.
- Apply for a Grant of Letters of Administration – they would have to satisfy the Court that they have attempted but been unable to locate the beneficiary. The application may cost about $5,000.00 and take 3 months. Once a Grant is obtained they will be able to claim the funds from the bank. Unfortunately, once the bank funds are received, there is a new problem regarding distribution. Technically one tenth of the money belongs to the missing beneficiary and can only be dealt with as follows:
- It could be held on trust in a separate account until that beneficiary can be found or is presumed dead under the common law presumption of death (after 7 years);
- It could be sent to the Public Trustee to be administered in the “unclaimed moneys fund” which eventually means it is paid to the state government; or
- The estate could apply for what is known as a “Benjamin Order” to allow the funds to be distributed equally among the nine other children.
All this for less than $20,000.00 in a bank account! The children of the deceased were left with a massive problem that no-one wanted to deal with and dearly wished that their father had made a simple Will to prevent this situation arising.
Example 2 – A homemade Will, a family court order and a big tax debt
A divorced father of three adult daughters passed away leaving a Will which he had drafted himself. The Will left his estate to his three daughters in equal shares but directed that his life insurance policy be used to pay his debts, including any debt with the ATO.
By a family court order made some years before his death, the Deceased was required to pay his ex-wife a monthly sum for 5 years. At the date of his death, the Deceased had minimal assets apart from his life insurance worth $300,000, a tax debt worth $500,000 and a debt owing to his ex-wife of $200,000.
Usually life insurance is not available to pay the debts of a deceased person, but because of the drafting of the homemade Will, the only asset which may have been available to benefit his daughters was consumed by the debts left by the Deceased.
The daughters still had to apply for a Grant of Administration to claim the life policy and required extensive legal advice over 12 months to deal with their father’s Estate, from which they received no benefit at all.
Example 3 – An online will template
A married father of two teenage sons attempted to make his own Will by following an online template. Unfortunately he failed to follow the instructions about signing the document properly, and the document was only signed by one witness.
Instead of a straightforward Application for Probate his wife had to make an application under section 18 of the Succession Act 1981. This section allows the Court to dispense with the formal requirements for a Will and declare the document to be a Will. The application required detailed Affidavits regarding files which could be found on the Deceased’s computer, the content of the online template website, and the circumstances around the making and signing of the Will. The consequence was additional stress and work for his wife and far greater legal fees and time than would otherwise have been necessary.
Example 4 – An unadministered estate 15 years later
Imagine the surprise you would feel if you were contacted over 15 years after the death of your uncle and told that he owned a half interest in a property and had never made a Will!
As the Deceased’s wife had passed away and there were no children, grandchildren or parents of the Deceased, it would fall to the siblings of the Deceased to administer the Estate. In this case, the five siblings of the Deceased had also passed away, which meant our client was on equal footing with the other ten nieces and nephews of the Deceased to apply for a Grant of Administration. Having “cleared off” those with higher priority and obtained the consent of those on equal footing, our client was issued a Grant of Letters of Administration on intestacy. He was then able to advance the administration of the Estate by seeking a sale of the property and an account of the income generated by the property since the date of death.
Unfortunately, given the passage of time, two of the beneficiaries who would have been entitled to receive a share of the estate under the rules of intestacy passed away before they received any benefit. Further, one of the siblings of the Deceased had died in 1968 (over 30 years before the Deceased died) and had left one child with whom the Deceased had never had any contact. Under the rules of intestacy this person will receive 25% of the Estate, which is unlikely to be what the Deceased would have wished.
Had a Will been made, the appointed executor would have dealt promptly with the administration of the Estate and the Deceased’s wishes about who was to receive his property would have been carried out.
Conclusion
It is simply impossible to imagine all the various scenarios where the failure to make a valid Will has or will result in unexpected and complex outcomes. These are just a sample of a few we have come across in our practice in recent times.
Making a Will involves a relatively small amount of time and money when you consider the consequences which can follow if you don’t make one.
If you are in that position, please contact us today to make a Will. It is a simple step to protect your family from having to deal with unnecessary and avoidable problems on your death.
