On 24 March 2022, Western Australia woke up to the long-awaited news that WA parliament had passed the Administration Amendment Bill 2021 (WA).
When a person dies without leaving a Will, they are said to have died intestate. Their estate is distributed according to a formula in the Administration Act 1903 (WA) (the Act). The amount payable to the surviving relatives under the Act is called a statutory legacy.
The statutory legacy was last updated in 1982 and the amounts payable to surviving relatives if you die without a Will, up to the current changes, reflected that very outdated economic landscape.
In short, for the last 40 years if a person dies without a Will:
- leaving children and a spouse or de facto partner, then the surviving spouse or de facto partner was entitled to the first $50,000 of the estate and one-third of the balance of the estate;
- leaving no children but a spouse or de facto partner, the spouse or de facto partner was be entitled to the first $75,000 of the estate and one half of the balance; and
- leaving no spouse, de facto partner or children but parents, the parents were entitled to $6,000.
The changes, long overdue result in increased amounts. If a person dies without a Will:
- leaving children and a spouse or de facto partner, the amount the spouse or de facto partner receives is increased from $50,000 to $472,000
- leaving no children but a spouse or de facto partner, the amount spouse or de facto partner receives has increased from $75,000 to the first $705,000; and
- leaving no children or spouse or de facto partner, the amount the parents receive has increased from $6,000 to $56,500.
Another significant change is that these amounts are to be reviewed by the Minister every two years, which allows increases to follow as the cost of living and house prices increase too.
Whilst we celebrate the new changes to WA intestacy laws as they are long overdue and will help remedy some of the tragic inequities that arise on intestacy, they are no substitute for having a valid Will and still create enormous administrative hurdles for estates, especially when young children are left behind. Whilst these changes to the intestacy provisions will help the spread of assets in a better way, it is important to remember that they are only a default mechanism – and only with a Will can you avoid the blanket one size fits all approach of intestacy and create the outcome you actually want for your loved ones.