On 30 March 2022, Western Australia welcomed much needed changes to the Administration Act 1903 (WA) (Act).
These changes have increased the minimum distribution thresholds for family members of those who have died without a will.
As no changes had been made to the Act since 1982, the balance distributed to relatives no longer had the same market value.
Not only do these changes bring Western Australia in line with the rest of Australia, but they will also make a significant difference to the financial stability of those left behind.
What changes have been made?
If you die without a will, the division of your estate will occur according to the thresholds provided in the Act.
This differs based on the relatives you leave behind.
If you have a spouse (or de-facto partner) and children, your spouse will be entitled to the first $472,000 and one third of your estate (or the whole of your estate if the total value of your estate is less than this).
This threshold has been increased from $50,000.
If your estate is greater than $472,000, the remaining two-thirds will be distributed to your children in equal shares. If you only have one child, your spouse and child will be entitled to equal shares of the remainder.
If you have a spouse (or de-facto partner) with no children, your spouse will be entitled to the first $705,000 and one half of the remainder of your estate.
This threshold has been increased from $75,000.
If you do not have a spouse, de-facto partner or children, your parents will be entitled to $56,500 of your estate. This threshold has increased from $6,000.
How do the changes apply?
These changes are not retrospective, therefore, those that passed away before 30 March 2022, are subject to the old distribution thresholds.
For those that pass away on or after 30 March 2022 the new distribution thresholds will apply.
In addition, the new amendments call for a review of the above thresholds every two years, with the first review to take place on 30 June 2023. The review process includes a formula that is reflective of the current average weekly earnings of full-time adult employees in Australia.
This will ensure that the distribution thresholds continue to reflect the market going forward.
Do I need a will?
The changes to the Act will provide much needed financial support for the relatives of those who die without a will. Although these overdue changes are welcomed, they do not always reflect the wishes of the deceased and should not be viewed as a substitute for a will.
Please do not hesitate to contact the team at Lotus Legal for more information or advice on making a Will.