Whether you leave a Will or not your Estate could still be subject to a challenge.
If you die without a Will the rules of intestacy that apply in the relevant state will dictate how your Estate is to be distributed. (See Distribution on Intestacy). These rules are set out in legislation and are an attempt by the various state governments to strike a balance between the competing needs of different classes of dependants.
Generally speaking the distribution on intestacy will divide your estate between your spouse and children. If you don’t have a spouse or children, remote relatives will benefit.
Unfortunately, the rules of intestacy are a blunt instrument and do not take into account the particular circumstances of a particular family. As with fashion, a “one size fits all” solution means that it doesn’t really suit anyone.
For example, in Victoria, if you leave a spouse and children, your spouse is entitled to receive your personal chattels, a legacy of $100,000.00 and one third of the balance of the Estate. Your children receive an equal share of the remaining two thirds of the Estate residue. This distribution is the same regardless of how many children you have or how old they are. It does not take into account the financial resources of the family members involved or any special needs that they may have. As you can appreciate following this formula could end up being very inequitable. If the family home was in your sole name, it may need to be sold. Making a payment to independent adult children may leave insufficient funds to raise infant children.
As a result, an aggrieved family member, who is an eligible person, can still bring a claim for further provision from your Estate if the amount they are to receive does not make adequate provision for them. (See Making a Claim against an Estate).
The advantage of having a Will is, that when the Court is considering the claim, your wishes will be made known. You can include in your Will the reasons why you are making particular bequests and if the distribution to family members is unequal, or you are excluding someone altogether, you can explain why. This will not necessarily mean a claim by that person would fail but your reasons will be one of the factors the Court will take into account.
Finally, you should not underestimate the psychological power of the Will. We have had situations where family members who, due to their personal financial circumstances, could well have brought a successful claim for further provision, but didn’t do so because they respected the testator’s wishes.
