It’s unusual, but sometimes a person dies without a will and without any relatives who would be entitled to the estate under the rules of intestacy. So what happens to their estate?

In the last few years we have seen a few of these cases – generally involving individuals who have migrated to Australia many decades ago, where little is known about any family overseas.

In some instances, they may have had people very close to them (e.g. friends, step children), but these people are not entitled to their estate and cannot make a claim under the Family Provision Act.  

The law provides that in these cases, the person’s estate ultimately belongs to the government. This is known by an old fashion legal word – escheat.

While these rules operate harshly, there are a few things that can be done:

• The government rarely wants to be involved in administering a deceased person’s estate unless there is no other option and they may permit a suitable person to administer the estate. This allows some closure and the ability to sort through personal effects and sentimental items. Note, however, that being authorised to administer the estate does not change the fact that the government is ultimately entitled to the estate.
• A person who administers the estate is often entitled to apply for an executor’s commission, the maximum of which is 5% of the gross estate. Such an application will at least entitle the person administering the estate to some compensation and recognition.
• Once the estate is administered and the monies are paid to the government, it is possible for people to make a claim to the government on a moral basis to request it to pay some or all of the estate to them. This process is entirely discretionary, however we suggest that many of the same factors that apply in a Family Provision Claim (financial need of the applicant, size of the estate, nature of the relationship, competing needs) would be persuasive.
• Superannuation is not necessarily paid to a person’s estate and may be able to be separately claimed. This requires specific consideration of the superannuation fund rules.

If you need advice for similar matters, we would be happy to assist.