Inheritance rights of spouses or spousal inheritance rights is a topic which discusses whether the spouse of a person receives inheritance in the event that the person dies without a valid Will in place. This is called as dying intestate, i.e., dying without a valid Will in place.
When a person dies intestate there are specific rules stated in the state legislation on how their assets should be distributed. For instance, in NSW, the Succession Act 2006 states the rules around how assets should be distributed if a person dies intestate.
Before the question of inheritance rights of spouses is addressed, it is first important to understand that when a person dies intestate, the first people to be paid from their assets and estate are creditors, or all people who are owed money by the deceased.
This could include:
- debts to lenders or financial institutions like banks;
- funeral expenses; and
- any outstanding fees – administrative or legal fees.
Order Of Inheritance If A Person Dies Without A Will
In discussing inheritance rights of spouses, people always claim that the spouse receives everything when a person dies. However this need not be the case as there may be many other people who will have a claim to the person’s estate.
In NSW, when a person dies without a valid Will, there is a order of inheritance which is followed:
- Children and grandchildren
- Aunts and uncles
- The state
Rules Of Inheritance Rights Of Spouses
Under inheritance rights of spouses, the question which is most frequently asked is ‘what do spouses automatically inherit’. There are certain rules of inheritance rights of spouses which determine whether the spouse receives everything after their partner has died without leaving a valid Will.
- If the person dies leaving behind a spouse, and if he/she has no children from the current or previous relationship, then their spouse is entitled to the entirety of the person’s estate. This is after all the debts have been settled.
- If the person is in a marriage or de-facto relationship at the time of their death, the partner has priority over other family members for the majority share of the person’s assets.
- If a person is survived by a spouse with whom the person had children – the spouse will be entitled to the whole estate.
- In cases where a person has children from a previous relationship, the current spouse will receive all personal effects, a statutory legacy (calculated depending on the consumer price index) and half of the estate. The children, on the other hand, will be entitled to the other half of the estate.
- If a person has died intestate without a spouse, all the person’s children will receive equal shares of the estate.
Inheritance Rights Of Spouses Where Wills Are In Place
The rules of inheritance rights of spouses mentioned in the previous section of this article is applicable only where the person has died without leaving a valid Will.
When the person has prepared the Will, then naturally the inheritance rights of spouses depends upon whether or not the spouse has been nominated as primary beneficiary of the estate.
In general cases, inheritance laws favour the surviving spouse of the deceased over the children. However, in cases where a person feels that they were not adequately provided for in the Will, they can make Family Provision Claims to contest or challenge the Will.
This point can be best illustrated using a case study example. One popular example includes Bob Hawke’s (former Australian prime minister) Will wherein he left the majority of his estate behind for his surviving wife – his second wife.
Bob Hawke had three children from his previous marriage who received some entitlements from his estate, but far less than those compared to his second wife. In response to this, one of his three children from the first marriage challenged the Will, stating that it did not make adequate provisions for them.
In NSW, the Section 57 of the Succession Act (2006) provides a list of eligible people who can contest or challenge a Will. This includes biological children, current spouses, and former spouses among others.
In the above example, and all such similar cases, if a family provision claim has been made, the inheritance rights of spouses will largely depend on how the proceedings unfold and what kinds of settlements the parties reach.
Recommended Plan Of Action
As you may have realised, there are many complications when a person has died intestate. This often leads to disputes, no matter what the size and nature of the estate is. To avoid such matters it is very important to prepare a Will. If you wish that your spouse receives majority of entitlements, it is best to draft a Will that clearly states your intentions.
In doing so, it is advisable that you speak with experienced Wills and Estate Planning lawyers who can make the process smoother and faster for you. Ensure that you also prepare a comprehensive list of names of beneficiaries, and executors and all important information and details.
Importance Of Seeking Legal Advice
This article has discussed the inheritance rights of spouses both in cases where there is a valid Will in place and in cases where a person dies intestate.
An important thing to consider is that each state in Australia has different laws regarding Wills and Estate Planning. It is essential to be aware of the laws that are applicable to your jurisdiction.
Preparing a Will is critical if you wish to avoid potential disputes between family members and other relatives. Before you start preparing a Will, or if you are thinking about doing so, make sure you check examples so you know you are doing everything accurately.
For more information on this topic read the following blogs:
If you have any queries regarding the topic, please do not hesitate to get in touch with our friendly Wills and Estate planning team at JB Solicitors.
Contact us today.