If a person dies without leaving a Will, this is called dying intestate. How their estate will be distributed will depend on who they leave surviving them. The Administration Act 1903 (Act) is the legislation which sets out how the estate is divided for a person who dies without a Will. The Act takes into consideration only the assets which are held in a deceased person's sole name or defined interests in assets.
Changes were made to the Act in March 2022 which have increased the amounts which are to be given to certain people from an estate to start with (for example a spouse is to receive $472,000 up from $50,000) however they don't address a broader issue for people running a business.
When running a business or primary producing enterprise, assets are often held in trusts, corporate structures and even self managed superannuation funds. These assets do not form part of your estate and are dealt with in accordance with the relevant trust deeds or constitutions of the entities.
If you rely on the Act to dictate the distribution of your assets to beneficiaries after your death, you don't have any control as to how they are divided. As one example, if you own land in your own name and you have a number of people entitled to your estate this may require the land be carved up into smaller ownership parcels to satisfy the requirements of the division of your estate in accordance with the Act.
While families can work together and agree to divide an estate differently to the terms of the legislation to do so can be difficult as it requires the agreement of all beneficiaries and also it may mean that there are significant tax and duty costs for transferring of assets which could have been avoided with proper estate planning.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.