Inheritance issues: what happens when you die without a will

Despite a record $3.5 trillion of wealth to pass from parents in the next 20 years, a majority of Australians have not put their wishes in writing.

Twelve million Australians do not have a will, new research suggests, despite the pandemic prompting a rise in people thinking about their own mortality.

Dying without a will can spark family fights, result in unintended people receiving your wealth, and lead to delays that tie up assets for years – not something any family wants in today’s high-inflation world.

A new survey by Finder.com.au has found almost 60 per cent of adults do not have a will, and there is a big split between women (69 per cent) and men (50 per cent) without one.

It found the number of people with a will jumped from 30 to 40 per cent between March 2020 and October 2022, although 9 per cent say they will never draw up a will.

“When the global pandemic hit our shores, it brought into sharp focus our own mortality in some ways,” says Finder insurance specialist James Martin.

“Many took this as a chance to get their affairs in order. Some took to the web to download online kits to ensure they were covered for the unforeseen,” he says.

Wills stand up legally, but some can cost thousands of dollars. Picture: iStock

However, estate planning specialists often recommend against simple will kits, especially when people have complex assets or blended families, because if not completed correctly can still lead to legal challenges.

A well-prepared will may cost between $600 and $2500 but can potentially deliver beneficiaries much more savings through tax structures if you die.

Tribeca Financial CEO Ryan Watson says the fee to prepare a proper will is often worth the investment, and dying without one “makes everything a lot more complicated”.

“If you die without a will, you die intestate, that is you basically leave it up to the Australian court system to divide up your assets,” he says.

“As such, at least some of your assets could go to unintended people. Would you want people you don’t like ending up with some or all of your money?”

Watson says if people die without a will, their assets could be tied up for years, “because the process of probate will need to be decided through the court system”.

“The estate will generally cover funeral costs. It can just take some time draw the funds from the estate.

“The old attitude of ‘she’ll be right’ can be a dangerous one when it comes to your will.”

Finder’s Martin says planning now can save your loved ones stress and heartache later.

“The biggest benefit of drawing up a will is the peace of mind it brings in ensuring your hard-earned assets are distributed among those you wish,” he says.

“Estate planning is about much more than just dividing up your finances; it also allows you to ensure that you receive the medical care you want, that your children are properly cared for if you die unexpectedly, and even that you’re given the funeral you want.”

Originally published as Inheritance issues: what happens when you die without a will