Intestacy Rules in NSW

1. What is Intestacy in NSW?
2. How does the Legal Process around Intestacy work?
3. Applying for Letters of Administration 
4. Do I need an Administration Bond?
5. Who Can Challenge the Distribution of Assets?
6. To Prevent Legal Headaches, Create a Will in Advance

Intestacy may occur if the person making the Will did not have the mental capacity to make the Will or it was poorly drafted without following proper legal rules of construction. In cases when only a part of the Will is held to be valid, it creates a partial intestacy.

The succession laws in every State and Territory are different. Generally, in every State, the assets are distributed according to a pre-determined formula with certain family members receiving a defined percentage of the assets.

What is intestacy in NSW?

Intestacy can occur in three situations:

1. When an individual dies without a Will
2. When the Will fails to properly dispose all the assets of the estate
3. When the Will is invalid because it has not been signed and witnessed as per the legal requirements.

The Succession Act 2006 (New South Wales Consolidated Acts) (the Act) provides the Order and the pre-decided formula in which the eligible relatives of an intestate inherit the deceased’s estate. In case there are no eligible relatives of the intestate, the State takes over the estate. Section 103 of the Act provides a person is entitled to his/her share from the deceased’s estate only after the funeral, administration expenses, and liabilities of the deceased have been paid off.

In addition to the advice below, Owen Hodge’s expert Sydney-based estate lawyers can help you deal with cases where intestacy occurs or assist with estate planning to avoid it becoming an issue.

How does the Legal Process around Intestacy work?

The NSW laws were amended in 2010 and the new norms are applicable to the distribution of the estate of the people who had died intestate on or after 1 March 2010. The requirement of the ‘30 days survivorship’ period which requires that a relative of an intestate needs to survive the deceased by 30 days has been newly added.

The meaning of the term ‘spouse’ has been expanded to include the ‘de facto’ partners for 2 or more years or with whom the intestate may have had a child. The Act now recognises multiple spouses for the purposes of succession, where the deceased might have had a married partner and another de facto partner. The partner may be of the same or opposite sex. The new law also makes provision for distribution of the estate of an indigenous person as per his or her own customs.

The process is summarised below:

1. Confirm that the deceased does not have a will.
2. Obtain a certified copy of the death certificate.
3. Determine who is entitled to apply under NSW’s intestacy rules.
4. Advertise a notice of your intention to apply for a grant of Letters of Administration on the relevant probate database.
5. Complete and file the forms. These are the five most common documents you will need to submit to obtain the letters of administration:
   a) Summons of administration
   b) Grant of administration
   c) Inventory of property
   d) Affidavit of applicant for administration
   e) Affidavit that deceased was not in a de facto relationship (if applicable).
6. Obtain consent from other entitled people for you to be the administrator of the estate.
7. 14 days after your notice of applying was advertised, you may submit your application and supporting documents online.

Applying for Letters of Administration following an Intestate Death.

In case anybody dies intestate, any of the eligible relatives can apply for obtaining a ‘Letters of Administration’ which would grant the authority to the person to distribute the assets as per the law.

The Affidavit filed by the person seeking to be an administrator must identify the deceased’s eligible relatives by supplying the necessary birth, marriage, and death certificates, and should list the searches made for a Will or other document that sets out the deceased person’s testamentary intentions, provide a list of the assets and liabilities of the deceased and attach the death certificate.

The person should also publish a notice of intended application online at least 14 days before the day you intend to fill the application and from 21 January 2013 onwards this notice of intention to apply must be made on the Supreme Court Online Registry website.

The administrator’s duties involve arranging the funeral of the deceased, collecting the assets, and distributing them after paying any debts and taxes. The administrator must establish the family tree using certified evidence which is an expensive and time-consuming task. The joint property owned by the deceased with another person is not considered a part of the estate of the deceased.

Do I need an Administration Bond?

In case of a minor being an inheritor of an intestate estate, the Court may Order the administrator to obtain an administration bond which is a guarantee by a third party like an insurance company, to make good any loss in case the administrator fails to properly administer the estate. The bond is usually equal to the value of the estate. The NSW Trustee and Guardian are exempt from obtaining the bond when acting as an administrator of an intestate estate.

Apart from the spouse or children of the deceased, the parents, siblings, grandparents, aunts and uncles, and first cousins are also entitled to a share out of the deceased’s estate.

Who can challenge the distribution of assets?

The distribution of the assets of an intestate estate may be challenged by many people including dependents of the intestate such as people who may have a just or moral claim or any organisation or person for whom the deceased was reasonably expected to have made a provision. In case the deceased was associated with charity, the charity is also entitled to a claim on the deceased’s estate.

It is always safer to make a Will so that the people whom you think are entitled to your estate get their due share. However, if you are acting as an administrator or seek to challenge the distribution of an intestate’s estate, please feel free to contact our team of expert estate lawyers at Sydney’s Owen Hodge Lawyers for guidance.

To prevent legal headaches, create a will in advance.

Writing a will is a crucial step in ensuring one’s wishes are honoured and assets are distributed according to their preferences after death. Without a will, intestacy laws may dictate how the estate is divided, leading to outcomes that do not align with the individual’s intentions. A well-drafted will prepared allows for the clear and legal distribution of assets, minimising the likelihood of family disputes and ensuring that loved ones are provided for appropriately.