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What happens if my partner and I die together without having made our Wills?

 


What happens if my partner and I die together without having made our Wills?

Good estate planning ensures that your assets will be distributed according to your wishes after your death. However, if you haven’t made a Will before you die, then you die intestate, and the distribution of your estate and superannuation can become complex, particularly if you and your partner were to die in an accident (such as a car crash).

This is because dying without a Will can lead to complex and unintended consequences. Victorian intestacy laws and the rules governing superannuation distribution can significantly affect how your estate and superannuation benefits are handled. This is particularly the case when partners or family members pass away at the same time, owning property together.

Consulting with an estate planning professional is a crucial step in protecting your legacy and ensuring your family's future is secure.

Speak with an estate planning lawyer today: 03 9014 1299

Understanding intestacy in Victoria

People who die without a valid Will are said to have died intestate. When this happens, the distribution of their estate will be governed by the intestacy laws in the Administration and Probate Act 1958 (Vic). These laws direct how the estate will be divided among surviving relatives based on the predetermined formula contained in the legislation.

Simultaneous deaths and intestacy

If you and your partner die at the same time and neither of you had a Will, the key issues to consider are the survivorship rules and the rules for distributing your estate(s).

Survivorship rules

In cases of simultaneous death, there is often no medical evidence to show who died first, and it can be challenging to determine who actually survived, even if for a very short time.

In Victoria, the survivorship rule assumes that the younger partner survived the older partner and will have received the older partner’s estate. Therefore, the younger partner’s estate would include the older partner’s estate and would be distributed under the laws of intestacy.

Distribution of estate

Where there are no children

If you and your partner do not have children, then the estate will be distributed to the surviving relatives of the surviving partner. However, if neither of you has living parents, siblings, nieces or nephews, then the surviving partner’s estate may ultimately go to more distant relatives.

Where there are children

If you have children from your relationship, or if there are children from previous relationships, then the estate will typically be divided among the surviving children. The specific distribution will depend on the number of children and whether they are from previous relationships.

Distribution of superannuation assets after death

Superannuation does not automatically form part of your estate. It is instead managed by the superannuation fund trustees according to the fund’s rules and any Binding Death Benefit Nominations (see below) you have made. If you have not made a Binding Death Benefit Nomination, then the distribution of your superannuation benefits can become very complex.

Binding Death Benefit Nominations (BDBNs)

If you have made a BDBN, then the superannuation trustees are legally bound to distribute your superannuation benefits according to your binding nomination. However, if you have not made a BDBN (or if your BDBN has lapsed), then the superannuation fund trustees will use their discretion to decide how to distribute your superannuation benefits to your family members.

This means that it is important to first check whether your BDBN will lapse (usually after three years) or if it is non-lapsing and lasts until it is either changed or a partner dies. 

But what happens if both partners have made their BDBNs appointing their legal representatives to receive their death benefits, and both die a short time later in a car crash while the BDBN has not lapsed and is still valid? Under intestacy laws, the surviving partner would be the legal representative of the estate of the first partner to die.

This is where it would be best to get proper legal advice before making the BDBNs because the wording in the superannuation trust deed and in the BDBN could make all the difference.

Speak with an estate planning lawyer today: 03 9014 1299

Trustee discretion

Trustees will generally consider the following when deciding how to distribute superannuation benefits after death:

Dependents: Priority is usually given to dependents, such as children or other financial dependents.

Legal Personal Representative: The trustees may pay the benefits to your legal personal representative, who will then distribute them according to intestacy laws (in the absence of a valid Will).

Steps to take to avoid intestacy

To avoid the complications and uncertainties of dying intestate, consider taking the following steps:

  1. Make your Will

The most effective way to ensure your estate is distributed according to your wishes is to create a legally valid Will to direct how your assets, including any property, investment, and personal belongings, are to be distributed.

  1. Update your superannuation Binding Death Benefit Nominations

Make a BDBN with your superannuation fund to direct the trustees to distribute your superannuation benefits according to your wishes and bypass the need for trustee discretion.

Note that many superfunds require BDBNs to be updated, reviewed, and renewed regularly. At the time of writing, if a super fund does not allow for non-lapsing BDBNs, then they must be renewed every three years. If you do not renew your BDBN after three years, distribution of your superannuation after death may be at the trustee’s discretion.

  1. Consider a simultaneous death clause in your Will

In your Will, you can include a simultaneous death clause to specify how you want your estate to be handled if you and your partner die at the same time, especially when it is difficult to determine the order of death. This can provide additional clarity and prevent disputes among potential beneficiaries.

Seek professional advice from an estate planning lawyer

By creating a Will and making binding nominations for your superannuation death benefits, you can ensure that your assets will be distributed according to your wishes to provide peace of mind for your loved ones. A well-drafted Will can also incorporate a clause to address the scenario where you and your partner die simultaneously.

Consult with an estate planning lawyer to help you draft a Will and make appropriate superannuation nominations. A legal professional can provide tailored advice to ensure all your assets are managed according to your wishes.

Contact David Davis Lawyers

Phone: 03 9014 1299
Email: admin@ddavis.com.au

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