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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2009-02-05 Daily Xml
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ADMINISTRATION AND PROBATE (DISTRIBUTION ON INTESTACY) AMENDMENT BILL

Second Reading

Second reading.

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (16:47): I move:

That this bill be now read a second time.

I seek leave to have the second reading explanation inserted in Hansard without my reading it.

Leave granted.

The Administration and Probate Act 1919 deals with deceased estates and includes provision for intestacy, that is, the distribution of the estate in the case where the deceased did not make a will or where the will disposes of only part of the estate. In the absence of a will saying what the deceased intended to happen to the property, the law leaves the estate to his or her closest surviving relatives.

The intestacy distribution is set out in section 72G. If the deceased left a spouse or domestic partner, but no children, then the spouse or domestic partner inherits the whole estate. If the deceased left children, but no spouse or domestic partner, then the children share equally in the estate. If, however, the deceased left both a spouse or domestic partner and also children, the section says that the spouse is to receive the first $10,000 and half the balance of the intestate estate. The children will receive the other half of that balance, in equal shares. The intestacy distribution reflects the generally-accepted view that it is the spouse or domestic partner who should be the primary beneficiary of the estate where the deceased failed to make a will.

The first $10,000 of the estate, which is left to the spouse or domestic partner, is sometimes called the statutory legacy. The amount was fixed in 1975 and has never been increased. This Bill proposes to increase the amount to $100,000 initially and to permit further increases by regulation in future.

The present figure of $10,000 is the lowest in Australia. The figure in New South Wales and in the Australian Capital Territory is $200,000, in Queensland it is $150,000 and in the Northern Territory, $120,000 (although in the latter three jurisdictions, whether the spouse will receive half or only one-third of the balance of the estate depends on the number of children). In Victoria, the figure is $100,000 and in Western Australia and Tasmania, it is $50,000, though in these cases the spouse receives 1/3 and the children 2/3 of the balance. In New Zealand, the figure is $121,500, although again the surviving spouse receives only one-third, not one-half, of the estate.

Different views exist about the purpose of the statutory legacy. One view is that it is meant to meet the spouse’s needs while the estate is being distributed, which can take some time. It enables him or her to continue living for the time being as he or she is accustomed. Another is that it helps the spouse to retain the matrimonial home, where the home is not in joint names or where it is mortgaged. Another view is that it is a simple way of ensuring that, in the case of a small estate, the spouse will usually inherit the whole estate. That may be especially relevant where a small business, on which the surviving spouse depends, constitutes the main asset of the estate.

On any of these views, the amount of $10,000 is now too low. Property values, and the cost of living, have increased substantially since 1975. Indeed, when the National Committee on Uniform Succession Laws considered the question in its 2007 report, it judged that the figures in all jurisdictions were too low and that the statutory legacy should be uniformly increased to $350,000. No jurisdiction has, as yet, taken up this suggestion. As far back as 1985, the Tasmanian Law Reform Commission suggested that the figure of $50,000 was too low for Tasmania, although the figure has not been increased.

The Government believes it would be reasonable to increase the figure to $100,000, matching that in Victoria. The Government also believes that it would be wise to permit the amount to be increased in future by regulation, as necessary to keep pace with future Consumer Price Index increases. That is what this Bill would do. The transitional provision of the Bill ensures that this increase applies only to deaths occurring after the amendment commences, so there will be no effect on the distribution of any pending estate.

I commend the Bill to Members.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Amendment provisions

These clauses are formal.

Part 2—Amendment of Administration and Probate Act 1919

3—Amendment of section 72G—Distribution of intestate estate

Section 72G provides for the distribution of an intestate estate. Currently, in the event that an intestate estate is to be divided between a spouse (or domestic partner) and the deceased person's children, grandchildren or lineal descendents, the spouse (or domestic partner) is entitled to the first $10,000 with the remainder being divided in two equal parts between the spouse (or domestic partner) and the person's children, grandchildren or lineal descendents. This clause proposes to increase the entitlement of the spouse (or domestic partner) to the first $100,000 or a greater amount that may be prescribed by regulation.

Schedule 1—Transitional provision

This schedule provides that the amendments made in this measure only apply in relation to the estate of a deceased person whose death occurs after the commencement of the amendment.

Debate adjourned on motion of Hon. D.W. Ridgway.

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