Important changes to Victoria’s inheritance laws came into effect this month that are much better for surviving partners than the outdated law they replaced.
But in Queensland and New South Wales the law is lagging behind, which is something people in those states who haven’t written wills should be aware of.
Victoria’s new Administration and Probate and Other Acts Amendment (Succession and Related Matters) Act 2017 offers far more favourable terms for surviving partners than the almost 60-year-old Administration and Probate Act 1958 did.
Previously, if a person died intestate (without a will), their partner was entitled to the personal items, the first $100,000 of the estate, and one third of the balance of the estate, with the remainder going to the child or children of the deceased.
Under the revised law, surviving partners will no longer share the inheritance with their children when their partner passes away without a will – all assets will pass directly to the surviving partner.
Rachael Grabovic, a special counsel and wills expert at Rigby Cooke Lawyers, said this long-awaited amendment addressed the significant financial insecurity and angst surviving partners faced under the previous law.
“For surviving partners with mortgages over jointly-owned property, the survivor often couldn’t cover the repayment of the mortgage with their share of the estate,” Grabovic said. “The new law provides that where the intestate leaves a partner and children, or grandchildren or more remote lineal descendants of that particular relationship, the surviving partner is entitled to the whole of the intestate’s estate.”
Differences in family structures – particularly around children from previous relationships – that were not so prevalent 60 years ago, are also reflected in the new law.
‘If a person leaves a current partner but has children that are from another relationship, the partner is only entitled to the whole of the estate if it is worth less than the partner’s statutory legacy, which is currently set at $451,909,” Grabovic explains.
“If the value of the estate is greater than the statutory legacy, then the surviving partner is entitled to the personal chattels, the statutory legacy (plus any interest accrued on that amount) and one half of the remaining balance of the estate.
“In this case, the children of the deceased are entitled to the remaining balance of the intestate’s estate, and if more than one, in equal shares.”
The sweeping nature of this new law makes it more important than ever to clarify your wishes in a will, particularly if you would prefer for your estate to be administered differently upon your passing to how the law sets out.
It’s also worth checking the intestacy laws in your state, because they all have slightly different default terms. In Queensland and New South Wales for example, the current laws are lagging, and still more closely reflect Victoria’s old law.
Important information: The information provided on this website is of a general nature and for information purposes only. It does not take into account your objectives, financial situation or needs. It is not financial product advice and must not be relied upon as such. Before making any financial decision you should determine whether the information is appropriate in terms of your particular circumstances and seek advice from an independent licensed financial services professional.