Topic 1 – Intestate Succession

Article: Intestacy in NSW: The 1977 Statutory Amendments (1979) 53 ALJ 77

Refers to the "prescribed amount" has now changed, it is no longer $50,000, it is now $200,000.

When a person dies without having made a Will or if they made a Will but the Will does not dispose of any property, (for example it may simply appoint an Executor "A"- "to give the whole of my estate to "B" - and "B" may have predeceased the testator. In this case there is an intestacy but there is an executor so you would still have a grant of probate) = Total intestacy and the estate is to be distributed entirely in accordance with the intestacy provisions of the Wills ,Probate and Administration Act 1898 (NSW).

If the deceased dies and leaves a Will disposing of some, but not all of his property, then the deceased is said to have died "partially intestate" in which case the Wills, Probate and Administration Act 1898 (NSW) prescribes who will take the property and in what proportion in which they will take.

We will only be dealing with the situation of a person dying after 1 January 1978.

PROBATE AND ADMINISTRATION ACT 1898 - SECT 61B
Succession to real and personal property on intestacy

61B Succession to real and personal property on intestacy
(1) Where a person dies wholly intestate, the real and personal estate of that person shall, subject to the payment of all such funeral and administration expenses, debts and other liabilities as are properly payable out of the estate, be distributed or held in trust in the manner specified in this section, and the real estate of that person shall be held as if it had been devised to the persons for whom it is held in trust under this section.
(2) If the intestate leaves a spouse but no issue, the estate shall be held in trust for the spouse absolutely.
(3) If the intestate leaves a spouse and also leaves issue, then if the value of the estate (excluding any household chattels) does not exceed the prescribed amount, the whole estate shall be held in trust for the spouse, but if the value of the estate (excluding any household chattels) exceeds the prescribed amount, then:
(a) the household chattels (if any),
(b) the prescribed amount, and
(c) one-half of the estate (excluding any household chattels and the prescribed amount),
shall be held in trust for the spouse and the residue of the estate shall be held in statutory trust for the issue of the intestate.
(3A) Notwithstanding subsections (2) and (3), if the intestate leaves a spouse and a de facto spouse, the whole or, as the case may be, such part of the estate of the intestate as is required to be held in trust for the spouse of the intestate shall be held in trust for:
(a) where the de facto spouse was the de facto spouse of the intestate for a continuous period of not less than 2 years prior to the death of the intestate and the intestate did not, during the whole or any part of that period, live with the person to whom the intestate was married-the de facto spouse, or
(b) in any other case-the spouse.
(3B) Notwithstanding subsection (3), if the intestate leaves a de facto spouse and also leaves issue but no spouse, the whole or, as the case may be, such part of the estate of the intestate as would, if the intestate had left a spouse, be required to be held in trust for the spouse of the intestate shall be held in trust for:
(a) where the de facto spouse was the de facto spouse of the intestate for a continuous period of not less than 2 years prior to the death of the intestate-the de facto spouse, or
(b) in any other case:
(i) except as provided by subparagraph (ii)-the issue as if the intestate left no spouse, or
(ii) where the intestate leaves no issue being children of the intestate or where such of the issue as are children of the intestate are issue also of the de facto spouse-the de facto spouse.
(4) If the intestate leaves issue but no spouse, the estate shall be held in statutory trust for the issue of the intestate.
(5) If the intestate leaves no spouse and no issue but one or both of the intestate’s parents, the estate shall be held:
(a) where both parents survive the intestate, in trust for those parents in equal shares, or
(b) where only one parent survives the intestate, in trust for that parent absolutely.
(6) If the intestate leaves no spouse, no issue and no parents, the estate shall be held for the following persons living at the death of the intestate and in the following order and manner:
(a) firstly, in statutory trust for the brothers and sisters of the whole blood of the intestate; but if there are no such brothers or sisters, then
(b) secondly, in statutory trust for the brothers and sisters of the half blood of the intestate; but if there are no such brothers or sisters, then
(c) thirdly, in trust for the grandparents of the intestate and, if more than one of them survive the intestate, in equal shares; but if there are no such grandparents, then
(d) fourthly, in trust for the uncles and aunts of the intestate (being brothers or sisters of the whole blood of a parent of the intestate) and, if more than one of them survive the intestate, in equal shares; but if there are no such uncles or aunts, then
(e) fifthly, in trust for the uncles and aunts of the intestate (being brothers or sisters of the half blood of a parent of the intestate) and, if more than one of them survive the intestate, in equal shares.
(7) In default of any person taking an interest under subsections (2) to (6), the estate shall belong to the Crown as bona vacantia, and in place of any right to escheat.
(8) The Crown, without prejudice to any other powers, may, out of the whole or any part of the property devolving on it as bona vacantia, provide for dependants, whether kindred or not, of the intestate and any other persons for whom the intestate might reasonably have been expected to make provision.
(9) Spouses shall for all purposes of distribution under this section be treated as separate persons.
(10) Where household chattels referred to in subsection (3) (a) are subject to a hire-purchase agreement within the meaning of subsection (1) of section 2 of the Hire-Purchase Act 1960 or within the meaning of any enactment of another State, or of a Territory, of the Commonwealth corresponding to that subsection, the surviving spouse, as referred to in subsection (3), shall be entitled to those chattels but subject to the rights of the owner under the agreement and under the provisions of the Hire-Purchase Act 1960 or, as the case may be, of the enactment of that other State or that Territory corresponding to that Act.
(11) Subsection (3) (a) has effect subject to section 145 of the Conveyancing Act 1919 .
(12) Where the prescribed amount is held in trust for a spouse of an intestate under subsection (3), the spouse is entitled, in addition to the spouse’s entitlement under that subsection, to interest on that amount at the rate prescribed for the purposes of section 84A from the date of death of the intestate until that amount is paid or appropriated to the spouse.
(13) Notwithstanding subsection (3), where the interest of an intestate in a shared home is, under section 61D, held in trust for a surviving spouse of the intestate, the share of the intestate’s estate to which the spouse would, but for this subsection, have been entitled under subsection (3) (b) and (c) shall:
(a) where the value of that interest is equal to or exceeds the value of that share, be deemed to be fully satisfied and, if the value of that interest exceeds the value of that share, the share of the issue under subsection (3) shall be reduced by the amount of the excess, or
(b) where the value of that interest is less than the value of that share, be deemed to be satisfied to the extent of the value of that interest.
(14) This section has effect subject to the provisions of section 24 (Effect of disposal of home shared by spouses under enduring power of attorney in cases of intestacy) of the Powers of Attorney Act 2003 .

No surviving spouse

This is provided for under s.61 B(.4) & (7) of the Wills ,Probate and Administration Act 1898 (NSW).
If there is no surviving spouse then the estate is inherited by any issue in Statutory Trust. Issue is lineal descendants, no matter how remote.
Statutory Trust is defined by s.61C of the Wills ,Probate and Administration Act 1898 (NSW), and basically it means that all children living at the date of death of the intestate take in equal shares, as tenants in common, but if a child has died leaving issue then those issue take in equal shares the share that his or her parent would have taken had the parent been alive at the date of the intestate's death. This is called "distribution per stirpes" as opposed to distribution "per capita", it is distribution by branches of the family and not by heads.

If there was a distribution per capita then as there are eight children/lineal issue, then each would take one eight of the estate. However, the Wills ,Probate and Administration Act 1898 (NSW) states that it is distributed to issue on statutory trust, per stirpes. Therefore each child, "A"„ "B", & "C", if alive would each take one third.

If "C" predeceased the intestate then "A" and "B" would each take half each.
If also "A" died before the intestate then "B" would take half, "Al" and "A2" would each take one quarter being the half that "A" would have taken if alive.
If "Al" also predeceased the intestate then "A3" and "A4" would each take one eight, being the quarter that their parent "Al" would have taken.

Thornton v Brunsden (1956)

Facts: it was argued that before you could begin the per stirpes distribution there had to be at least one of the head class living at the intestates death, i.e. if "A", "B", & "C" had predeceased the intestate then none of their issue, "Al", A2", "A3", "A4", or "B1", even though living could not take unless at least one of "A", "B", or "C" was alive. In which case the distribution then would have to go to the next class.

Held: This argument was not accepted by the court. It was only on a total failure of all members of the first class did you pass on to the next category of next of kin. If “A4” was the only surviving issue then “A4” would take all the estate.

If there were no surviving spouse and no surviving issue, then we would go to the next class which is:

Parents
This is provided for under s.61 B(5) of the Wills ,Probate and Administration Act 1898 (NSW). Parents take in equal shares if they are both alive or solely if only one living.

If both parents are deceased then the next class is:

Brothers and sisters of the whole blood
This is provided for under s.61 B(6)(a) of the Wills ,Probate and Administration Act 1898 (NSW). Brothers and sisters of the whole blood (both parents are common parents to the brothers and sisters as well as the intestate) take in statutory trust. This means that nephews and nieces, great nephews and nieces etc will take in the event that their parents are dead.

If there are no brothers and sisters of the whole blood or all brothers and sisters of the whole blood are deceased then the next class is:

Brothers and sisters of the half blood
This is provided for under s.61 B(6)(b) of the Wills ,Probate and Administration Act 1898 (NSW). Brothers and sisters of the whole blood (one parent is in common to the brothers and sisters and the intestate) take in statutory trust.

If there are no brothers and sisters of the half blood or all brothers and sisters of the half blood are deceased then the next class is:

Grandparents
This is provided for under s.61 B(6)(c) of the Wills ,Probate and Administration Act 1898 (NSW). Grandparents take in equal shares if they are both alive or solely if only one living.

If there are no grandparents living then the next class is:

Uncle and Aunts
This is provided for under s.61B(6)(d) of the Wills ,Probate and Administration Act 1898 (NSW). Uncle and Aunts take in equal shares if they are both alive or solely if only one living.
This refers to uncles and aunts of the intestate who are the brothers and sisters of the whole blood of parents of the intestate. Children of uncles and aunts, that are the intestate's cousins, are not eligible next of kin for an intestacy. Uncles and aunts do not take under statutory trust.

If there are no uncles and aunts of the whole blood of the parents of the intestate living then the next class is:

Uncle and Aunts (half blood)
This is provided for under s.61 B(6)(e) of the Wills ,Probate and Administration Act 1898 (NSW). Uncle and Aunts take in equal shares if they are both alive or solely if only one living.
This refers to uncles and aunts of the intestate who are the brothers and sisters of the half blood of a parent of the intestate. This may occur, say if an intestate's parent remarries and have other children by that marriage.

If there are no uncles and aunts of the half blood then the estate shall belong to:

The Crown
This is provided for under s.61B(7) of the Wills ,Probate and Administration Act 1898 (NSW). The estate belongs to the Crown as bona vacantia.
Note: If making a will and something is to be left to the cousins, it is best to name them by name rather than refer to leaving an item to your first cousin as the term may not be what you think.

Surviving Spouse

Surviving spouse and no issue
If there is a surviving spouse but no issue then under s.61B(2) of the Wills ,Probate and Administration Act 1898 (NSW) the surviving spouse takes the whole estate.

Surviving spouse and issue
If the intestate leaves a surviving spouse and issue then under s.61 B(3) of the Wills ,Probate and Administration Act 1898 (NSW):
1. The surviving spouse takes the "household chattels" absolutely.
2. Then, if what is left after taking out the household chattels, is less than the "prescribed amount" then the surviving spouse takes the whole estate.
3. If what is left after taking out the household chattels is more than the "prescribed amount" then the spouse gets
(a) The prescribed amount and
(b) Half of what is left.
The remaining half goes to the issue on statutory trust.

PROBATE AND ADMINISTRATION ACT 1898 - SECT 61A
Application and interpretation

61A Application and interpretation
(1) This Division shall not apply in respect of the estate of a person who died wholly or partially intestate before the commencement of section 5 of the Wills, Probate and Administration (Amendment) Act 1977 and any such estate shall be distributed in accordance with the enactments and rules of law in force at the death of that person.
(2) In this Division, except so far as the context or subject-matter otherwise indicates or requires:
"dwelling-house" means:
(a) a building that is designed to be used, or designed to be used principally, as a separate residence for one family or person, together with the land which forms the curtilage of the building, or
(b) an apartment or flat that is so designed, together with any interest in any part of the building of which the apartment or flat forms part, or in any part of the curtilage of that building, that is owned or otherwise held in conjunction with that apartment or flat.
"household chattels", in relation to an intestate, means all furniture, curtains, drapes, carpets, linen, china, glassware, ornaments, domestic appliances and utensils, garden appliances, utensils and effects and other chattels of ordinary household use or decoration, liquors and consumable stores and domestic animals, which, immediately before the intestate’s death, were owned by the intestate (whether absolutely or subject to any charge, encumbrance or lien securing the payment of money) or in which, immediately before the intestate’s death, the intestate held an interest as grantor under a bill of sale or as hirer under a hire-purchase agreement within the meaning of subsection (1) of section 2 of the Hire-Purchase Act 1960 or within the meaning of any enactment of another State, or of a Territory, of the Commonwealth, corresponding to that subsection, but does not include any motor vehicle, boat, aircraft, racing animal, original painting, trophy, clothing, jewellery or other chattel of a personal nature which was so owned by the intestate or in which the intestate held such an interest.
"interest", in relation to a shared home, means:
(a) an estate in fee simple,
(b) a leasehold estate which has not less than 14 years to run or, in the case of a leasehold estate having less than 14 years to run, which confers a right of renewal for one or more terms of not less than 14 years in the aggregate, or
(c) an exclusive licence to occupy conferred by virtue of a holding of shares in a company that owns the parcel of land on which is erected the building in which the shared home is included,
and includes an interest held by an intestate as a tenant in common (but only if there is only one other tenant in common and that tenant in common is the surviving spouse of the intestate for whom part of the estate of the intestate is required to be held in trust under section 61B (3), (3A) or (3B)), but does not include an interest so held as a joint tenant.
"prescribed amount", in relation to an intestate’s estate, means:
(a) if no regulation referred to in paragraph (b) is in force at the death of the intestate-$200,000, or
(b) if a regulation made under section 153 and prescribing another amount is in force at the death of the intestate-that other amount.
"shared home", in relation to an intestate’s estate, means a dwelling-house in which the intestate held an interest in respect of which the surviving spouse or de facto spouse of the intestate for whom part of the estate of the intestate is required to be held in trust under section 61B (3), (3A) or (3B) is entitled to exercise the right conferred by section 61D.
"value":
(a) in relation to:
(i) an intestate’s estate, or
(ii) a share of any person in such an estate,
means the value, fixed in accordance with section 61E, of that estate or share at the date of the intestate’s death, and
(b) in relation to an interest in a shared home included in an intestate’s estate, means the value, fixed in accordance with section 61E, of that interest:
(i) where the right conferred by section 61D is exercised with respect to that interest within the period of 12 months after the intestate’s death-at the date of that death, or
(ii) where that right is exercised after the expiration of that period-at the date on which the right is exercised.
(3) References in this Division to a child or issue living at the date of death of any person shall be construed as including references to any child or issue who has been conceived and not born at that date but who is subsequently born alive.
Note: “Household chattels” and “Prescribed amount” is defined under s61A(2).
The date for value of the estate is at the date of death: s61A.

Right of surviving spouse to Elect to take the Matrimonial Home – s 61D Wills, Probate and Administration Act 1898 (NSW)

PROBATE AND ADMINISTRATION ACT 1898 - SECT 61D
Rights of surviving spouse with respect to shared home

61D Rights of surviving spouse with respect to shared home
(1) Subject to the Fourth Schedule, where:
(a) an intestate dies leaving a spouse and issue,
(b) the value of the estate of the intestate (excluding any household chattels) exceeds the prescribed amount,
(c) the intestate, at the time of the intestate’s death, held an interest in a dwelling-house which is situated in New South Wales, and
(d) that dwelling-house was, at that time, occupied by the intestate and the intestate’s spouse or by the intestate’s spouse as their, or as the spouse’s, only or principal residence,
the spouse may require the administrator to hold that interest in trust for the spouse, and on being so required, the administrator shall hold that interest accordingly.
(2) A reference in subsection (1) to the spouse of an intestate is, where the intestate dies leaving a spouse and a de facto spouse, a reference to the spouse or de facto spouse for whom part of the estate is required to be held in trust under section 61B (3), (3A) or (3B).