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Beneficiary |
Inheritance distribution by law |
|---|---|
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Spouse/ defacto partner Only (No Children) |
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Spouse / defacto partner and Children (All from the Same Relationship) |
|
|
Spouse / defacto and Children from another Relationship |
|
|
Children Only (No Spouse/ defacto partner) |
|
|
No Spouse/ defacto or Children |
|
|
No Living Relatives |
The estate passes to the NSW Government (referred to as bona vacantia). |
Why Not Having Will is a Bad Idea
Why Not Having a Will is a Bad Idea
According to the NSW Trustee & Guardian, up to 52% of Australians pass away without having a will, a situation legally known as dying intestate.
When this happens your estate is distributed following a strict legal formula, under Intestacy laws, regardless of what loved ones may expect, or what would be considered the personal wishes of the deceased or family.
Dying without a will can have unintended and heartbreaking consequences, especially for families with blended relationships, overseas partners, or adult children from previous relationships.
Dying without a will can also have tax implications for the beneficiaries, something that can be avoided by talking to an accountant regarding Estate planning and preparing your Will.
What Happens If You Die Without a Will?
Intestacy Laws in NSW (2025) In NSW, if a person dies without a valid will, their estate is distributed according to the Succession Act 2006 (NSW). The distribution follows a specific hierarchy:
(In NSW, a person is considered legally a de facto if they have been living together in a genuine domestic relationship for at least 2 years, or have a child together, or are registered as de facto partners under the NSW Relationships Register Act 2010.)
Dying without a valid will can lead to
- Unintended Beneficiaries: Assets may be distributed to relatives the deceased had little or no relationship with.
- Exclusion of Non-Blood Relations: Stepchildren, foster children, and unmarried partners may not inherit under intestacy laws.
- Legal Disputes: Increased potential for disputes among surviving relatives.
Example Scenario of dying without a will:
Who Gets What When There’s No Will?
Paul (58) is a business owner who has been living with Ana (38) for 3 years after his divorce. Paul as two adult children, a daughter (24) who works in his business and another son (27) who did not grow up in his care and he has only seen a few times. Paul loved life, was a busy and successful. He was thinking about getting his affairs in order but died unexpectedly without a will.
Paul’s situation:
- Owns a $2 million home (in his name only)
- Owns a business valued at $1.5 million
- Has two adult children from 2 previous relationships. His daughter was raised in the home he lived in and runs a separate business from his business premises.
- Lives with his 36-year-old de facto partner, Ana, who is from overseas and in the process of applying for Australian residency
- Paul had only seen his son a few times throughout his life.
What Happens Under Intestacy Law?
Because Paul died without a will, the law steps in and applies a legal formula to divide his estate. And here’s the outcome:
As a defact partner Ana could receive:
- All of Paul’s personal belongings
- A statutory legacy ($580,000)
- 50% of the remaining estate after that
Paul’s two adult children would receive equally:
- The other 50%
Estate Value Breakdown Check Under Intestacy Law
Total estate = $3.5 million
Statutory legacy (Ana) = $580,000
Remaining estate = $3.5M − $580K = $2,920,000
The split:
Ana (spouse): 50% of remaining estate = $1,460,000. Ana in total receives $2,040,000 + all of Pauls personal belongings.
Pauls 2 children (50% total): split equally = $730,000 each
Ana inherits 60% of the estate. Paul’s daughter inherits just over 20% of Pauls estate, as does his son. All three may also be affected by tax depending on the structure of the inheritance, reducing the actual amount.
Ana inherits the bulk of the estate, even though Paul built his wealth over decades, raised his daughter in the house, and had no legal documentation expressing that Ana should inherit most of after such a short time together.
To make matters more complex, Ana may now have legal control over the home where Paul’s daughter grew up, and possibly the business too, depending on its structure.
If his adult children wanted to contest the breakdown they would have to begin costly legal proceedings separately.
How This Could Have Been Avoided
- By talking to an Accountant and getting help organising his estate and Will, Paul could have ensured his business and assets were passed on as he intended, in a tax effective manner.
- Avoided emotional and legal battles between family members
Accountants Are a Key Part of the Will Process
- Accountants provide a big-picture financial strategy for your estate.
- Work alongside your solicitor to ensure the Will aligns with your financial structure.
- Keep your financial data up to date for regular estate reviews.
- Make sure your Will is structured for maximum tax efficiency
- Provide asset protection strategies
A clear Will reduces time and money spent in court. This helps avoid family provision claims and intestacy disputes, which can deplete the estate through legal fees.
At Cashflow Financial, we work with trusted estate planning experts to help you get your finances and your legacy in order. Whether it’s your will, superannuation nominations, or estate tax planning—we can help you take care of it all.