Intestacy rules – who is entitled to inherit?

Dying without a will (intestate) – who inherits?

Intestacy is when you die without leaving a will.  You are said to have died “intestate”.  In the absence of instructions left in a valid will, who will inherit your property?  Succession law contains strict rules to deal with this problem.

This is an outline of the application of the intestacy rules. They specify the order of entitlement as to who inherits and in what proportion, as well as the provision of a sum of money (statutory legacy) for the spouse or partner.  

Contents

• Intestacy – distribution of the estate according to the statutory intestacy rules
• Must outlive the deceased in order to take
• Under intestacy priority is given to surviving spouse/partner and children
• The statutory order in the intestacy rules
• Step-children, adopted children and illegitimate children
• What about in-laws?
• When would an estate pass to the government (the Crown)?

Under the law a person is an intestate if they die without leaving a will, or if they did, part or all of their will does not effectively dispose of their property. The legal rules on intestacy then apply.

Intestacy – distribution of the estate according to the statutory intestacy rules

The property of an intestate person, their estate, is distributed according to strict legal rules as set out in the succession and wills legislation in each state and territory.  You can find links to these statutes under ‘Wills & Intestacy’ on the Legislation page by clicking here.

The estate available for distribution is all the property left over after the payment of funeral and administration expenses, debts, tax, and other liabilities as required to be paid.  Basically it is the intestate’s residuary estate.

Must outlive the deceased in order to take

It is a condition that a person must survive the deceased for a period of time, (generally at least 30 days) before they can take their entitlement.  Underlying succession law is the policy that beneficiaries must outlive the deceased before they can take their share.  The objective is to save double administration.

The impact of this survivorship requirement on who inherits is seen when families all die together in a calamity such as a car accident or plane crash.

Under intestacy priority is given to surviving spouse/partner and children

The intestacy rules set out a formula or order of priority which are worked through to determine the entitlements in each case.   The rules are  based on close family connections and blood relationships (next of kin), with highest priority being given to the spouse or partner and children.  In referencing children, the legal term “issue” is used, find out what  issue means here.

The statutory order in the intestacy rules

In outline the order on who is entitled to take generally runs as follows:

1. Spouse of the intestate, includes de facto spouse, partner, same-sex partners.
2. Issue

Then if the intestate left none of the above, the intestacy rules provide for the following relations of the intestate to benefit:

3. Parents;
4. Sisters and brothers:
5. Aunts and uncles;
6. Cousins.

In New South Wales, the statutory rules on dying intestate are found under Chapter 4 of the Succession Act 2006 (NSW).

The legislation provides entitlements for spouses under Part 4.2.  The statutory order for distribution among relatives is set out under Part 4.3.  Other provisions in Part 4.4 address indigenous persons’ estates. 

Step-children, adopted children and illegitimate children

Illegitimate or ex-nuptial children and adopted children are regarded as “children” under the law, and treated the same as natural legitimate children.  More about the inheritance rights of illegitimate or ex-nuptial children can be read by clicking here. 

It may be possible for a stepchild to become entitled, especially if they are eligible persons under the family provision, family maintenance provisions of the law. The law is changing on this issue and there have been some decisions where the meaning of a child includes a step-child.

What about in-laws?

A mother-in-law and father-in-law are not entitled to benefit. They are not next of kin. Nor can a step-parent.

When would a deceased estate pass to the government (the Crown)?

The estate will only go to the state/territory government as unclaimed property without an owner (bona vacantia) if the intestate deceased was not survived by at least one person from any of the following:

• spouse or partner;
• issue, (children, grandchildren);
• parent;
• sister or brother;
• nephew or niece;
• grandparent;
• their aunt or uncle;
• cousin, being a child of their aunt or uncle.

This is the general position.  There are some variations between the states and territories.  As always, obtain legal advice as to the application of the law to your circumstances.

When there is no one to inherit

If no one can be found who is entitled to inherit an intestate person’s estate, provisions under Part 4.5 of the Succession Act 2006 (NSW) for example, allows the State (the State Government) to be entitled to it.

However the legislation also provides the State with a discretion to make provision out of its entitlement in special circumstances.  See s 137 of the Succession Act 2006 (NSW).

BStead
BHS Legal
5 September 2014, updated June 2023