Dying without a Will can take on an entirely new meaning when there is more than just the division of assets at stake. Having children or dependents but no Will can mean that an estate can be distributed in a way that isn’t in line with the deceased’s wishes. More significantly, it means that provisions for the ongoing care of children will be determined by the courts, based on who is deemed to have ‘sufficient interest’ in the child.
So, what does this actually mean for the child, and how does this scenario play out in Australia?
A child’s entitlement to the intestate estate
Without a Will, the laws of intestacy dictate how an estate will be divided by the next of kin or the elected administrator. If both parents died intestate, this will simply involve distributing the estate based on the standard formula determined by the law in their State. Usually that means that all children (from past and present marriages) are entitled to equal shares of the estate.
This can be problematic because the formula doesn’t consider any special care that might be required by a particular child, or the costs associated with taking care of a younger, dependent child versus an older child who, for example, works full-time. In the case of children who are considered minors, they won’t receive their benefit until they turn 18.
The law is also unable to deal with sentimental heirlooms and that desire by a parent for a particular possession to be gifted to a specific child.
Guardianship of the child
If a Willmaker has minor children, they will typically appoint a testamentary guardian in their Will. In the event that one parent dies, the surviving parent becomes the sole guardian of the child or, in some states, becomes the guardian alongside any guardian appointed in the deceased parent’s Will.
If there is no surviving parent, and no guardian appointed by the parents, the Supreme Court can appoint a guardian.
A child’s guardian inherits a great deal of power and influence over the life of the child, and would ideally have the necessary time, age, energy, responsibility, values, income and loving bond to properly care for the child.
Legally, guardianship ceases when the child reaches 18 years of age.
The Court’s decision
The Family Law Act of Australia provides that any person with ‘sufficient interest’ can apply to the Family Court or Supreme Court for guardianship, if the decision does fall to the Court.
For children with separated parents, very strong-willed grandparents or other concerned family members, this can result in arguments between relatives as to who should be the legal guardian. This becomes a significant and costly (financially and emotionally) exercise, which can take a toll on all involved (and the relationships between them), not least of all, the child at the centre of everything.
In a scenario with multiple applicants, the Court has the power to appoint a person based on what it believes is in the ‘best interests of the child’.
If nobody makes an application to care for the child or to be their guardian, then the child may pass into the care of the State.
Despite even the best judgement of the Court, it can be difficult to truly say what is in the best interest of the child, if the true wishes of the parents are never known due to the absence of their Will.
When both parents die, a minor child can’t directly inherit any property or assets from an estate. The effect of this is compounded when there is no Will because there is a lack of provision for the handling and management of a minor’s inheritance by a guardian or trusted person.
By appointing a guardian in your Will you are making your wishes known, reducing any potential conflict between the family left behind. Without a legal Will in place, the courts may be left to decide what’s best for your children…and you mightn’t agree!
So, it goes without saying that writing a legal Will should be a top priority for any parents.
Disclaimer: The content of this blog is intended to provide a general guide to the subject matter. This blog should not be relied upon as legal, financial, accounting or tax advice.