Select from any of the filters or enter a search term
Calendar
Calendar

Changes to succession laws

Changes to succession laws

By Victorian Law Reform Commission

Succession 

0 Comments


Latest amendments address matters including what happens when a person dies intestate.

Snapshot

  • The latest round of reforms came into effect on 1 November 2017.
  • There are amendments to the Administration and Probate Act 1958 (Vic), the Guardianship and Administration Act 1986 (Vic) and the Powers of Attorney Act 2014 (Vic).
  • Fees charged by executors are also addressed.

The commencement of the Administration and Probate and Other Acts (Succession and Related Matters) Act 2017 (Vic) completes the legislative changes flowing from the Victorian Law Reform Commission’s (VLRC)review of succession laws.

Many of the VLRC’s recommendations in regard to small estates, wills, debts and family provision were implemented by changes introduced by the Justice Legislation Amendment (Succession and Surrogacy) Act 2014 (Vic). The latest round of reforms, which came into effect on 1 November 2017, amends the Administration and Probate Act 1958 (Vic), the Guardianship and Administration Act 1986 (Vic) and the Powers of Attorney Act 2014 (Vic). The amendments address matters including what happens when a person dies intestate; the controversial question of fees charged by executors; and ademption. A number of the reforms are briefly described here.

Intestacy

The VLRC’s recommendations regarding intestacy have been introduced in a new Part IA of the Administration and Probate Act 1958 which specifies the entitlements of all next of kin on intestacy. New limits have been placed on the next of kin who are able to inherit on intestacy: the capacity to inherit will now stop at first cousins. The rationale for this change is that next of kin inquiries are time-consuming and expensive, and cases involving remote next of kin are rare.

The new provisions improve the position of partners in cases where the deceased is survived by a partner and children. As recommended by the VLRC, the statutory amount paid to the deceased’s partner has increased. This position was strongly supported by submissions, and is similar to the approach taken in NSW and Tasmania. A new s70M of the Act has increased the minimum statutory legacy to $451,909, using a formula indexed to the CPI. Further, where the deceased person is survived by a partner and children or other issue who are entitled to a share on intestacy, the partner’s share of the remainder of the intestate estate has been increased to one half.

Additionally, the definition of partner in the Act has been amended to include registered caring partners, as defined by reference to the Relationships Act 2008 (Vic). These partners are now entitled to inherit on intestacy in the same circumstances as spouses and domestic partners.

Executors’ fees

The VLRC’s recommendations on fees paid to executors, and what steps can be taken if they are excessive, have been implemented in part.

New provisions make the executors more accountable to interested beneficiaries. Executors may not rely on a remuneration or commission clause in a will unless the will-maker gave their informed written consent before the will was signed. If there is no remuneration clause or the clause does not authorise the type of remuneration sought, executors may only receive a commission from the estate if they have the fully informed consent of all interested beneficiaries.

In the event of an executor charging excessive fees, the Supreme Court has the power to review and vary commissions, charges and disbursements claimed by executors and administrators out of estates. This can be done by the Court’s own motion or by application of any person interested under the will, including interested beneficiaries and creditors.

Ademption

Under the common law of ademption, a specific gift to a beneficiary fails if it is no longer in the estate at the time of the will-maker’s death. The beneficiary is not entitled to the equivalent value of the gift in cash. As recommended by the VLRC, an exception to the law has been created when property is sold or otherwise disposed of during the will-maker’s lifetime by a person acting under an enduring power of attorney. A similar exception already existed for administrators appointed under the Guardianship and Administration Act. Beneficiaries under a will may apply to the court if the effect of the exception results in a beneficiary receiving an unjust advantage or disadvantage.

For more details about the Succession Laws report and the VLRC’s current inquiries, see lawreform.vic.gov.au.

This column is contributed by the VLRC. For further information ph 8608 7800 or see www.lawreform.vic.gov.au.

1. Victorian Law Reform Commission, Succession Laws: Report (2013).

 


Disclaimer: Views expressed by commentators are not necessarily endorsed by the Law Institute of Victoria Ltd (LIV). No responsibility is accepted by the LIV for the accuracy of information contained in the comments and the LIV expressly disclaims any liability for, with respect to or arising from any such views.

Be the first to comment