Despite achieving the status of music royalty, Prince’s untimely death at the young age of 57 years has once again highlighted the simple fact that no one can avoid the fallout from dying without a Will.
Whilst hard to believe that a superstar of Prince’s status would not execute a single document to say who inherits his wealth, his family have filed papers to declare that Prince died without a Will. This means that Prince died ‘intestate’ and his family and the Courts are left to deal with the resulting mess that is likely to take years to sort out – not a legacy that Prince is likely to have wished to leave behind.
So, what happens to Prince’s ‘Little Red Corvette’ and other assets? That will be up to the law in Minnesota… but what would happen if Prince lived right here in Western Australia and held his assets here?…
If Prince lived in Western Australia, there is a formula imposed by section 14 of the Administration Act 1903 that dictates who inherits the estate and in what proportions. Although each person’s intentions are different, it is very unlikely that this formula will mirror exactly what each person wishes to happen to their estate and therefore will most likely be problematic.
For example, if Prince died leaving a wife and children, the wife would receive a statutory legacy of $50,000 and one third of the remainder of his estate. The other two thirds would be divided between his children. Interestingly, the statutory legacy of $50,000 (which represented the median house price in the 1980s – definitely a ‘Sign o’ the Times’) has not increased since 1982. For many widows or widowers left behind, $50,000 plus a third of the estate is simply not enough to maintain the same standard of living that the widow or widower may have become accustomed to whilst the deceased was alive.
If a beneficiary is not sufficiently provided for by the section 14 formula, their only recourse is to commence proceedings under the Family Provision Act 1972, which normally incurs significant legal costs and entails lengthy delays in finalising the estate.
By delaying the crucial exercise of making a Will, you run the real risk of dying intestate. It is unfortunate when fighting over money takes precedence over mourning the loss of a loved one. To actively attempt to avoid disputes with respect to your estate, everyone should have (at the very least) a basic estate plan, including a valid and up to date Will.
Contact us at firstname.lastname@example.org if you wish to discuss this matter further.