Changes to the Intestacy Laws in NSW

Date: Nov 30, 2009
Document Type: Article

The Succession Amendment (Intestacy) Bill 2009 (“the Bill”) was assented on 9 June 2009. It will come into effect from early next year 2010. 

The laws will change how estates are distributed if the deceased die intestate, i.e. without a valid will. A person who dies without leaving a valid Will is referred to as “the intestate”. 

The long title of the Act is “An Act to amend the Succession Act 2006 and the Probate and Administration Act 1898 to revise and re-state the rules for distribution on intestacy: and for other purposes”

The proposed changes are designed to simplify the asset distribution process when a person dies intestate. 

The laws do not apply if you have a valid will.

Under the NSW Intestacy law before the Bill comes into effect in 2010, spouses are entitled to the whole of the estate of the intestate if the value of the estate excluding household chattels does not exceed $200,000. If the value of the estate exceeds $200,000 the estate is distributed between the surviving spouse and any children. The surviving spouse receives a statutory legacy of $200,000 plus household chattels. The remaining estate is shared equally between the spouse and children of the deceased. 

The main change to the intestacy laws under the Bill, which comes into effect in 2010, is to the Rules affecting spouses. The new intestacy laws introduce the terminology “domestic partnership” and “multiple spouses”. 

A “spouse” includes a married person or domestic partner. A domestic partner may be someone of the same or opposite sex. 

“Multiple spouses” means more than one spouse. Spouse includes not only a married person but also a domestic partner. For the purposes of the distribution of an estate under the new intestacy laws, a person may be in a relationship with the married person and one or more domestic partners all at the same time. 

The main theme of the new rules is the priority of the spouse, which works as follows:

If the intestate dies leaving a spouse or spouses as well as children of the one or more spouses, then the spouse/s inherit the whole intestate estate and their children do not receive any benefit.  Under the current law the estate is divided between spouse/s and children. 

However, where the intestate leaves children from another relationship – that is other than with the current spouse – the estate is divided between the current spouse and the children from the previous relationship and children of the current spouse if any. 

Before the Bill comes into effect in 2010, a spouse or spouses receive or share between them: 

  • a legacy of $350,000 as adjusted by the CPI – under the current  law the legacy is $200,000 and only one spouse or one de facto spouse is entitled;
  • the intestate’s personal effects;  
  • one half of the remainder of the intestate’s estate;
  • children share the remainder of the estate;
  • another significant change is that first cousins will be entitled if no other relatives survive. Under the current laws, first cousins are not included in the distribution of an intestate estate. 

Under the Bill coming into effect in 2010, the categories of petitioners to the Crown for waiver of the rights of the Crown to the intestate’s estate if there are no living relatives has been expanded to include any organisation or the trustees of any organisation for whom the intestate might have been expected to provide. For example, if an intestate had a connection to a charity, or did volunteer work, or made regular donations, the charity would be able to petition the Crown for the whole or part of the intestate’s estate.  

The above is a ‘snapshot’ of the new Bill and is not a detailed analysis of its amendments. For more detailed advice contact us on (02) 8268 4000 or by email craddock@craddock.com.au
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