We talk a lot about the perils of dying without a Will, and the unnecessary mess, stress and cost that can be left behind. Yet, many people still don’t fully appreciate what that actually looks like for loved ones, or how their worldly goods will be divided up.
In New Zealand, most estates, regardless of size, are administered under the terms of the person’s Will.
Research a couple of years back, however, showed more than one in three Kiwis doesn’t have a Will (just over half of whom had children). In all, 1500 people die in New Zealand each year having not properly documented their wishes, including what is to happen to assets, and arrangements or provisions for any dependent children.
In such cases, the person is said to have died “intestate”, and the law steps in to say who is entitled to what share in the estate. (These rules also apply where the deceased person tried to make a Will, but didn’t complete it correctly – although, in some instances, the High Court has validated such Wills under the Wills Act 2007.)
Who gets what?
So, if you died tomorrow, and you didn’t have a valid will, who would share in your assets, and how much would they get?
The following covers most scenarios:
Spouse/partner, but no children, parents or other descendants: The spouse or partner – including civil union and de facto partners – receive all the estate. If there are more than one – and yes, it happens – the estate is divided equally among them.
Spouse/partner, and children, parents or other descendants: The spouse/partner receives all the personal chattels (essentially anything that can be moved.) As the threshold currently stands, the spouse or partner will receive $155,000 (plus interest), as well as a third of anything left. From there, any children receive two-thirds of the remainder. If a child has died, their share is left to their children.
Spouse/partner, no children or other descendants, but parents: The spouse/partner will receive$155,000 (plus interest), and two thirds of the remaining assets. Parents receive the remaining third.
No spouse/partner, but children or other descendants: The estate is equally divided amongst any children. If any have died, their share goes to their children.
No spouse/partner, children or other descendants, but parents: The estate is divided equally among the parents. If only one is alive, they receive all the assets.
No spouse/partner, children, parents, or other descendants, but siblings: The estate is divided equally among any siblings. If any have died, their share is left to their children.
None of the above scenarios, but grandparents and/or uncles/aunts: The estate is divided equally among the maternal and paternal sides. Where there are surviving parents, the estate is left to them. If there are no surviving parents, the assets are distributed equally to any aunts and uncles. Where any of the aunt and uncles are no longer alive, their share is passed to their children.
Where there are no direct family or other descendants: Everything goes to the State. However, any dependants can apply to Treasury, which has the power to pay out some of the estate.
When a loved one dies …
The ideal scenario is that they not only had a proper Will drafted, and updated it as necessary, but have let their nearest and dearest know that this is the case and where this vital document is kept – usually a law firm, or one of the Trustee companies.
If you don’t have a Will, or haven’t communicated clearly where it is, if you don’t rectify the situation before you die, you’re likely leaving behind a messy legacy for your loved ones.
Just for starters, it will have to be established, definitively, that there is no Will. Here’s just some of what’s involved:
- Writing to any previous lawyers and banks you used
- Contacting Public Trust, NZ Guardian Trust, Trustees Executors and Perpetual Trust to check if they have a Will for you on file
- Advertising in the New Zealand Law Society newsletter to see if any lawyers hold your Will
- Searching all your files and papers to see if there’s a Will
- Checking with everyone close to you to see if they hold your Will, or know where it’s kept
Hunt is over, and no Will?
As well as working out who will be entitled to benefit from the intestate estate, a decision needs to be made about who will administer it. The High Court must approve the appointment of Administrators and issue them a document called “Letters of Administration on Intestacy”. Your loved ones – or an estate lawyer – will need to obtain specific information to enable an application for Letters of Administration to be completed.
After conclusively ruling out the existence of a Will, your loved ones will have to, among other things:
- Provide confirmation of whether you had a spouse, civil union and/or de facto partner, and if there was a divorce or separation order in existence at the time of your death and, if so, obtain a copy of any order
- Obtain full details of any children you had (including any child who has died, and details of any children they have)
- Search the Births, Deaths and Marriages Register to verify whether you had any other children
- Ascertain full details of your assets and liabilities
There will also need to be an affidavit from the person applying for administration, which includes all the information established above, together with other details, as required by the High Court Rules.
The documents are then filed in the High Court. Once the High Court approves the Grant of Administration, it releases a sealed order, which can take up to six weeks. Once the order is granted, the Administrator can then proceed with administering your estate.
The process is often lengthy and, sometimes, complex. The extra work, delays, cost and stress can be particularly challenging for those left behind, who are typically managing their grief, as well.
Loved ones can have an estate lawyer do much of the work, and many do, due to how onerous it can be, and the technicalities. But this comes at a price – one that can be so easily avoided by what’s usually a relatively quick, simple session with your lawyer to put in place a proper Will, ensuring you decide what happens after you’re gone, rather than the State.