The Perils Of Not Making A Will
What do Michael Jackson, Abraham Lincoln, Picasso, Jimi Hendrix, Stieg Larsson and Robert Homes a Court all have in common?
You would be forgiven for thinking, not much. But in fact they do—all six died intestate which means, they died without leaving a Will. Even the rich and famous can fail to plan ahead when it comes to their estate.
What happens if someone dies without leaving a Will?
According to New South Wales law, if you don’t have a legal Will you have died intestate and your estate will be divided according to the rules of intestacy which is set in legislation.
This means that even if a friend or relative is appointed to obtain administration of your estate, the law decides who your beneficiaries are and how your estate is divided.
According to some statistics up to two-thirds of adults do not have a valid Will, potentially their leaving families with serious problems if they die. In all likelihood many more would make a valid Will if they knew what would happen if they died intestate.
Under New South Wales law, if a person dies without a Will and has a spouse who survives them by at least 30 days (including a de facto relationship as set out in the law) the estate is automatically given to the surviving spouse. This is the case even if there are children of the relationship.
After this, seemingly straight forward application of the law, the legislation provides a specific order of distribution of an intestate estate’s assets, depending on the particular situation.
Common scenarios in which an intestate’s assets are distributed include:
Spouse and Children
Where all the children are children of the relationship between the intestate and the spouse, the spouse takes the whole estate. If not all of the children are children of the relationship the spouse will take the following:
- Personal effects;
- Statutory legacy; and
- One-half of the remainder of the estate.
The Statutory legacy is determined by a CPI adjusted formula of the base amount set when the law was introduced in 2006.
Children and No Spouse
The children are entitled to the whole estate. If there is more than one child then the estate is distributed in equal shares between the children. Where a child has died before the interstate any grandchildren will take in equal shares the share the deceased child would have taken
No Children and No Spouse
The whole estate passes to the interstate’s parents in equal shares.
No Children, No Spouse and No Parents
Brothers and sisters will take in equal shares the estate provided they survive the interstate by at least 30 days. If a brother or sister does not survive the interstate but leaves children, then that share passes to the children of the deceased brother or sister.
These are just some common examples of how an estate will be divided according to the rules of intestacy which is set in legislation. There are other situations that might arise and your lawyer can advise you about the law depending on your personal circumstances.
Famous People who died without a Will
Famous or not, everyone should have a valid Will. It’s simple to do and it saves your family a lot of money and headaches as illustrated below:
Probably the most famous person not to leave a Will was Abraham Lincoln, the 16th president of the United States. Even though he was assassinated and died unexpectedly in 1865 he himself was a lawyer.
In 1970 Jimi Hendrix the famous musician died intestate and left a massive fortune to no nominated beneficiaries. The battle to control his millions took place over 30 years. His estate had the added complication of continuing to generate significant income after his death through record sales.
More recently in 2004 the Swedish author Stieg Larsson who wrote The Girl with the Dragon Tattoo died without leaving a Will. As a consequence Swedish law dictated that Larsson’s estate was to be divided up between his father and his brother. Sadly his lifelong partner of 32 years, Eva Gabrielsson, received nothing, although the family did grant her ownership of the couple’s apartment.
Robert Holmes a Court
In Australia Robert Holmes a Court, Australia’s richest man before the October 1987 stock market crash, left no Will when he died of a heart attack. At the time of his death his property and shareholdings were worth almost $460 million, while Heytesbury Holdings, the family’s private company, had estimated cash reserves of more than $154 million.
Interestingly, he had carried an unsigned Will with him for 18 months before his death.
Pablo Picasso died in 1973 at the age of 91. He was one of the most famous artists of the 20th century and left behind a fortune in assets that included artwork, homes, cash, gold and bonds. It took 6 years and $30 million to sort out his estate with his assets eventually being divided up among six heirs.
Although a Will was later discovered, immediately following Michael Jackson’s death in July 2009, his mother filed court papers claiming that Jackson died intestate. Like Hendrix, Jackson’s estate continues to generate money after his death. In the years since his death, his estate generated over $242 million.
As illustrated by the stories above, you’re never too young, or too smart or too powerful, not to need a Will.
To ensure that your estate and your desired beneficiaries are protected into the future and to avoid these avoidable dramas talk to an experienced wills and estates lawyer.