How wills work when someone dies

Making arrangements for your own death may seem confronting, but having a proper plan in place can make a big difference during a difficult time.

Whether you're dealing with the death of a family member or loved one, or thinking about your own estate planning, it's important to understand how the process works.

We spoke to two estate planning lawyers to find out what happens when someone dies, with or without a will.

If someone dies and they have a will, what happens?

When someone draws up their will, they are required to name one or more executors to take on the responsibilities of managing their estate.

Often, people name their spouse or a children as executor. You can also nominate a professional (such as a lawyer or accountant) or a public trustee to perform the role for a fee.

Some people may choose to appoint multiple executors. 

One common arrangement is for a will maker to appoint their children as joint executors to ensure they each have a say in the process.

Kimberley Martin, an estate planning lawyer based in Hobart, says executors have important responsibilities. 

"Their first responsibility is obviously to make arrangements for the funeral and disposal of the person's body," she says.

"At law, an executor has that duty in the first instance.

That means finding records of property ownership, investments held and all other assets, along with any debts the deceased may have held.

This can be complicated and time-consuming, and many executors may seek the help of a solicitor to help navigate the process.

Applying for probate and distributing the estate

Once all the assets and liabilities of the deceased are identified, the executor will apply to the court for a grant of probate — a legal document that certifies the will is valid. 

"Once you've got your grant of probate, you can move forward with calling in the assets," Ms Martin says.

"So, determining what's in the bank accounts, selling the properties, you can do all of the things necessary to get those assets across to the beneficiaries."

There may be other financial and tax matters to attend to such as finalising any outstanding tax returns.

"Once you've done all those matters, you can proceed to distribute the assets to the beneficiaries," Ms Martin says.

Sounds complicated? Well, it can be.

Even with a will, Ms Martin says estates often take 12 to 18 months to finalise. It could be longer shorter than that depending on the circumstances.

Challenging a will

If someone is unhappy about being left out of a will, or they believe they're entitled to a larger share of the assets, they can challenge the will.

Phillip McGowan, an accredited specialist in estate law based in Sydney, says wills are usually challenged in two main ways.

"One is to argue that the will is not valid," he explains.

"Perhaps the will maker was suffering from dementia at the time he or she made the will. [You may argue] an earlier will, made five years ago, was in fact the last valid will."

The other common challenge is what's known as a family provision claim.

"That is to say, 'I didn't get a big enough share out of the estate, and I should have got a share'," Mr McGowan says.

For example, if someone dies with two children, and leaves all the assets to one, the other sibling may decide to bring a family provision claim.

What happens when someone dies without a will?

When someone dies without a will, their assets are dealt with under the laws of intestacy. Usually the deceased's spouse or de facto spouse will have the primary entitlement to the assets. 

Instead of applying for probate, the primary beneficiary, often the spouse or de facto spouse, needs to apply to the court for letters of administration.

This is a legal document that allows the applicant to collect assets, pay debts and distribute the estate to the beneficiaries in line with intestacy laws.

"You need to apply to the court [for letters of administration]," Ms Martin says.

"You need to say who you are, how you fit in with the legislation to make the application, and then the court will assess that application."

It's important to note that intestacy laws are different in each state and territory.

There is a fixed formula that determines how assets are divided and it may cause undesirable results.

For example, estranged or distant family members may be entitled to a share of the estate.

What about super?

Unlike cash or real estate, super does not automatically form part of a person's estate when they die.

Any funds or other benefits (such as life insurance) are distributed in accordance with superannuation law by the person's super fund — not the executor of the will.

As super is often a major asset, it's important to understand the potential issues if you're an executor or forming your own estate plan.