What happens if you die without a will in Victoria

Most people who die without a will did not decide against one. They decided to do it next month.

I know this because I meet their families, usually six weeks later, with a folder of bank letters and a question: who is in charge? The answer is nobody, yet, and the follow-up, who gets what, is answered by an Act of Parliament written for the average family, applied to a family that is never average.

Here is what the Act does, where it goes wrong, and what a will does not fix anyway.

The order of distribution

Part IA of the Administration and Probate Act 1958 (Vic) sets a fixed order. Your estate, meaning everything that passes under a will or would have, goes to the first category that exists.

1. Partner only, no children: the partner takes everything. Partner means a spouse, a registered partner, or a domestic partner (lived together as a couple for at least two years, or have a child together).
2. Partner, and children who are all the partner's children too: the partner takes everything. The children get nothing directly. The Act assumes the partner will provide for them, which is usually right.
3. Partner, and a child from another relationship: the estate is split. The partner takes the personal chattels, the statutory legacy (a fixed sum indexed each year under the Act, in the order of half a million dollars), and half of whatever is left. The children, all of them, share the other half equally.
4. No partner: the children, equally. If a child has died leaving children of their own, those grandchildren take the child's share.
5. No partner, no children: parents, then brothers and sisters, then grandparents, then aunts and uncles, then first cousins, each category only if the previous one is empty.
6. Nobody at all: the State of Victoria.

Two more rules sit on top. A partner has a right to buy the home from the estate at valuation, if it would otherwise be shared. And more than one partner (a separated but not divorced spouse and a new domestic partner, for instance) share the partner’s entitlement under a formula that depends on how long the domestic relationship lasted. That second rule is the one that produces the outcomes nobody intended.

Where it goes wrong

Three examples from practice, details changed.

The second marriage. A man dies with a wife of twelve years and two adult children from his first marriage. Estate $1.6 million, mostly the house, in his sole name. Under the Act the wife takes the chattels, the statutory legacy and half the balance; the children share the other half. The wife, who assumed she would keep the home, must either buy the children out or sell. Nothing in that outcome was what he wanted, and he had told everyone what he wanted. He had not written it down.

The new partner. A woman dies after living with her partner for 20 months. No children. Under the Act he is not a domestic partner: the relationship was under two years and there was no child and no registration. Her estate goes to her parents. He can bring a family provision claim, which costs money, takes a year, and is decided by a judge who never met either of them.

The never-divorced spouse. A man separated nine years earlier, never divorced, and lived with a new partner for seven of those years. Both are “partners”. The Act splits the partner share between them by formula. His estranged wife, whom he had not spoken to since 2017, inherits a substantial share.

What a will does not control

This is the part of estate planning people skip, and it is often most of the money.

Superannuation. Super is not yours in the way a bank account is. It is held by the trustee of the fund, who pays the death benefit under the fund’s rules. If you have made a valid binding death benefit nomination, the trustee must follow it. If you have not, or it has lapsed (most lapse after three years), the trustee decides, usually among your dependants. Your will controls super only if the trustee pays it to your estate. For a person in their forties with a $400,000 super balance and life cover inside the fund, the nomination form matters more than the will.

Jointly owned property. A home held as joint tenants passes automatically to the surviving joint owner on death, outside the estate and outside the will. Held as tenants in common, each share passes under the owner’s will or on intestacy. Couples in second relationships who want their share to go to their own children need tenants in common, and most do not know which they have.

Life insurance paid to a nominated beneficiary goes to that person directly. Insurance paid to the estate goes under the will.

Assets in a family trust or company are not owned by you personally. What passes on death is control of the trustee or the shares, which is a different question with a different answer.

What happens on the day

Nobody is in charge. A bank will freeze a sole account on notice of death. A broker will not act. The house cannot be sold. Somebody, usually the person with the largest entitlement, applies to the Supreme Court of Victoria for letters of administration. That person must identify every potential beneficiary under the Act, advertise, and prove the family tree. For an estate with a partner and children of one relationship it is manageable; for a blended family or an estate with relatives overseas it takes months longer than probate on a will would.

What to do

1. Make a will. It takes less time than you have spent reading this article. Name an executor, say who gets what, and deal with the "what if" (what if a beneficiary dies first; who looks after children under 18).
2. Make a binding death benefit nomination with every super fund, and diarise its expiry. Nominate the estate if you want the will to decide; nominate people directly if you want the money to bypass the estate.
3. Check how your home is held. Joint tenants or tenants in common. It is on the title, and we can sever a joint tenancy if the answer is wrong for your family.
4. If you are separated but not divorced, do one or the other, and make a new will either way. Divorce revokes the gift to a former spouse in Victoria; separation does not.

We built an online will service because the single most effective thing a law firm can do for the families it will meet in twenty years is to make the will easy to do now. The Act is a good default for a family it was never going to meet. Yours deserves a document.