Dying without a will—also known as dying intestate—can create serious legal and financial complications. In Australia, when there are no eligible heirs to claim an estate, the government may step in and take possession of the deceased's assets through a process known as escheat. This guide explores everything you need to know about unclaimed estates and government claims in NSW, and how to avoid losing family assets to the state.
Understanding Unclaimed Estates and Government Claims
An unclaimed estate is one left behind by a deceased person who has no valid will and no identifiable heirs. In these cases, the estate may fall under the category of unclaimed estates and government claims, triggering a legal process in which the government takes control of the property.
This process is grounded in the legal doctrine of escheat, which gives the state the authority to acquire ownership of property that has no lawful heir. In New South Wales, these situations are governed by the Succession Act 2006 (NSW).
Who Inherits When There Is No Will in NSW?
If someone dies intestate in NSW, their estate is distributed according to a predetermined legal hierarchy. This system is designed to identify and prioritise eligible heirs to avoid falling into the category of unclaimed estates and government claims.
The legal order is as follows:
- If a spouse or de facto partner exists and there are no children from previous relationships, they inherit the entire estate.
- If there are children from another relationship, the estate is split between the spouse and children.
- If no spouse or children exist, the estate passes to parents, then siblings, and so on.
- If no relatives are found, the government steps in under the escheat process.
When Does the Government Take an Estate in Australia?
The government only assumes control of an estate when all other options have been exhausted. This means that unclaimed estates and government claims only arise after thorough searches fail to locate any eligible relatives.
In these cases, the NSW Trustee & Guardian steps in to manage the estate temporarily while investigating potential heirs. If no claim is made within 12 years, the estate is permanently transferred to the NSW government. This is when how estates can become unclaimed and fall to the state becomes relevant, as the government takes ownership.
The Escheat Process in NSW
To better understand unclaimed estates and government claims, it's important to look at how the escheat process unfolds:
- A person dies without a will and no known heirs.
- The estate is referred to the NSW Trustee & Guardian.
- A genealogical investigation is conducted to find any possible relatives.
- The estate remains in trust for 12 years.
- If no claimant is found, the government formally absorbs the assets.
In rare situations, long-lost relatives may come forward years later to reclaim the estate. However, this is legally complex and requires extensive proof.
What Happens to Unclaimed Inheritance in NSW?
When an estate becomes part of unclaimed estates and government claims, the assets are not left idle. Typically, they are redirected toward public benefit or consolidated into state revenue.
Some common outcomes include:
- Transfer to the NSW Consolidated Fund, which supports state services and infrastructure.
- Liquidation of property assets and reinvestment into government programs.
- Rare and difficult claims by distant relatives after escheat have occurred.
How to Prevent an Estate from Going to the State?
Avoiding unclaimed estates and government claims starts with proactive estate planning. Whether for yourself or on behalf of a relative, consider these essential steps:
Create a Legally Valid Will
The most effective way to protect your estate is to prepare a legally binding will. This clearly communicates your wishes and removes uncertainty.
Keep Your Will Updated
Over time, family circumstances change. Updating your will after key life events—such as marriage, divorce, or the birth of a child—helps avoid unwanted intestacy situations.
Seek Professional Estate Planning
Working with an estate lawyer can ensure your documents are properly structured and your intentions are legally sound. This reduces the risk of your estate falling into unclaimed estates and government claims.
Inform Loved Ones of Your Plans
Family members should be aware of your estate arrangements. This awareness ensures they know how to take action when the time comes.
Conduct Searches for Unclaimed Estates
If you believe a deceased relative may have left behind assets, you can check the NSW Trustee & Guardian website for unclaimed estates and take steps to make a claim. You can also understand who may be eligible before the estate becomes government property, which may help identify potential claimants early.
Common Questions About Government-Claimed Estates
Can the government take my inheritance?
No, not if you're a legal heir. But if no heirs can be found, the estate may be absorbed through unclaimed estates and government claims processes.
How long do I have to claim an estate?
You have up to 12 years to claim an unclaimed estate in NSW before it is permanently transferred to the government.
What if I discover an unclaimed estate later?
You may be able to lodge a claim if you can prove your relationship to the deceased. However, late claims after escheat are challenging and require legal assistance.
Can an estate be reclaimed after an escheat?
It is possible, though rare. Legal representation is typically necessary, and success depends on the strength of your evidence.
Conclusion
Understanding the risks of unclaimed estates and government claims is vital for protecting your legacy and your family's financial future. By creating a will, keeping it current, and educating your family, you can ensure your estate is passed down according to your wishes—not claimed by the state.
If you’re worried about intestacy or need help claiming a potential unclaimed estate, Legal Finda is here to support you. Our trusted network of NSW estate lawyers can help you navigate estate planning, claim a rightful inheritance, and avoid government intervention.
Secure your estate today. Contact Legal Finda for expert guidance on unclaimed estates and government claims in NSW.
