The reluctance of young adults to make a will is understandable. After all, estate planning is something to be considered later in life once they have accumulated significant assets or when they have started a family. However, the reality is that life is unpredictable, and having a will in place provides a sense of security and clarity for loved ones left behind. Encouraging young adults to consider their estate planning options can prevent the legal and emotional turmoil that often accompanies intestate succession.
Recent discussions about the increasing trend of young adults dying without wills has highlighted the critical importance of everyone over the age of 18 having a will in place. While each Australian state and territory has its own rules about what happens to a person's estate if they die intestate (without a will), the process of administering an intestate estate can be more protracted and costly than administering the estate of someone who had a valid will.
I have seen firsthand the complexities and emotional strain that arise when a loved one dies intestate. In Queensland, the rules governing intestate succession are designed to provide a fair distribution of a deceased person's estate among their next of kin. However, these rules can often lead to unintended consequences, especially for young adults who may not have considered estate planning as a priority.
Without a will to govern the distribution of the deceased’s assets, the estate is distributed according to a mechanism set by law. This may result in a misalignment between the way the estate must be distributed, and what the deceased would have wished.
In today's digital age, it is also crucial for young adults to consider their online presence and digital assets. Nominating legacy contacts for social media accounts and leaving details of account numbers and passwords, and access information for things like cryptocurrency wallets, with a trusted family member or in a secure, but accessible, place at home is essential. Ensuring someone knows where to find this critical information can prevent additional stress, cost and complications for loved ones who need to access, manage or close these accounts after your demise.
Regardless of whether an individual dies with or without a will, the process of accessing their bank accounts and other assets often requires obtaining orders from the Supreme Court in the form of a Grant of Probate (if there is a will) or Letters of Administration (if intestate). Banks typically have their own threshold amounts, and if the deceased's account balance exceeds this threshold, it is necessary to obtain those orders to access the funds.
Similarly, superannuation funds and life insurance companies also require proof that they are releasing the funds to the person properly authorised to handle the estate and to ensure the funds are distributed correctly and in accordance with the law.
Administering an intestate estate generally takes longer and incurs higher costs compared to an estate with a valid will. This is due to several factors. Because there is no will, no one has been nominated as executor to administer the estate. Therefore someone (usually a spouse or parent) needs to be appointed by the Supreme Court to act as the personal representative. Estate administration cannot commence until the Supreme Court issues Letters of Administration.
An often-overlooked complication arises when the parents of a young person who dies intestate are divorced. Disputes can emerge over who should be appointed as the personal representative of the estate. These conflicts can be emotionally charged and may lead to prolonged legal battles, further delaying the administration of the estate and increasing the costs involved. This situation underscores the importance of having a will, where an individual can name the executor who is to manage their estate.
While each jurisdiction has mechanisms to manage the estates of those who die without a will, the process is invariably more complex, time-consuming, and costly. By understanding the importance of having a will and taking proactive steps towards estate planning, adults both young and old can ensure their wishes are honoured, and their loved ones are spared unnecessary hardship.
