In Brief: Important changes to Victoria’s intestacy laws have come into effect from 1 November 2017.

Intestacy in Victoria

When a person dies in Victoria without leaving a valid Will, the estate of the deceased person is distributed according to the provisions of Part IA – Intestacy of the Administration and Probate Act 1958 (Act). Intestacy is the term which refers to position where a person dies without a valid Will (a full intestacy), or leaves a valid Will which disposes of some, but not all of the deceased’s estate (a partial intestacy).

Victoria has recently amended its intestacy laws, and from 1 November, 2017 the new intestacy provisions contained in the Act, came into operation, as follows:

1.   In order to participate in the distribution of an intestate estate, a person has to survive the deceased by thirty (30) days;

2.   The distribution of the estate on intestacy is briefly:

a)  Where the deceased leaves a partner, but no child – the partner takes the whole of the deceased’s estate;

b)  Where the deceased leaves a partner and children, and the children are also children of the surviving partner, the partner takes the whole of the deceased’s estate.

c)  Where the deceased leaves  a partner and a child or children who is not the child of the partner, then:

   i)  the partner takes:

1. the personal chattels, plus

2. the first $451,909 (the statutory legacy), plus interest on the statutory legacy from date of death to payment (the partner taking all of the estate if the estate is worth less than the statutory legacy), plus

3. One half of the balance of the estate, and

 ii) the children of the intestate are entitled equally among them to the other half of the balance of the estate in equal shares.

d)  If the deceased leaves more than one partner, then the partners, in the absence of a distribution order or agreement will take the partner’s share equally among them.

The statutory legacy is indexed each year for movements in the Consumer Price Index (Melbourne). There is also provision in the revised statute to deal with the situation where the deceased leaves more than one partner.

The statutory formula for the distribution of an intestate estate differs from state to state (and territory). The assets of an intestate are distributed according to the statutory formula of the relevant jurisdiction. This can result in the assets of the intestate being distributed according to different statutory rules. For example, if a person dies intestate leaving assets in, say Victoria and in Western Australia, the assets situated in Victoria will be distributed according to Victorian law, and the Western Australian assets will be distributed according to the laws of that state.

How to avoid intestacy

Intestacy often has unintended consequences. It can result in close family members being left in difficult financial circumstances, and can enrich more distant or estranged members of the family. Only a properly drawn Will will ensure that your estate passes to beneficiaries of your choosing in the manner of your choosing, and that your estate will be administered by a person or persons of your choosing.

If you need advice in relation to your estate planning, including the preparation of a comprehensive Will, or if you have questions relating to a deceased estate, please contact Peter Holdsworth on 03 9242 9742 or peter.holdsworth@madgwicks.com.au.