“Nothing can be said to be certain, except death and taxes,” wrote Benjamin Franklin way back in 1789. Death may be certain and inevitable but what happens to our assets after we die depends on how well prepared we are.
In New Zealand, many estates are administered under the terms of the person’s Will - but statistics suggest that more than 50 per cent of New Zealanders don’t have one in place. A person who dies without a Will is said to have died “intestate”, and the law dictates who is entitled to their assets.
What you need to know
People often procrastinate creating a Will because they don’t want to think about dying. Many put off doing their Will until after they have finished building their house, because they are occupied with their children, because they are off on holiday, because they are running a hectic business…but those are the exact things that should spur them on. None of us knows when our number will be up, and the very things that keep you from signing off your Will are the things that will cause stress and uncertainty for your loved ones if they don’t know what your wishes were. So, as the population ages, there are more and more people passing on without a valid Will executed.
Having a Will makes the process of deciding who gets what very simple and clear-cut. Your lawyer applies to the court on behalf of your executor/s to have the Will validated – known as getting Probate granted. Once Probate has been granted, the executor/s adminster the Will by carrying out your wishes.
If there isn't a Will and you die intestate with more than $15,000 in the bank, your lawyer has to apply for letters of administration. This is like Probate; in that it gives authority to an individual to administer your estate. Somebody has to put up their hand and take charge of the administration. That may not be the person you want to administer your estate but if you die intestate it means you don't get to choose who administers or benefits from your estate. It is mandated on your behalf.
Get a Will if:
- You are concerned about who you would want to administer your estate;
- You want to decide who your assets go to without it being decided by the court;
- You have children under the age of eighteen and have preferred guardians for if the other parent is deceased or unfit;
- You want to avoid fighting or undue stress in your family.
Who gets what?
When an individual is alive they may signal their intentions about who should get what when they die, but it's very hard to prove a verbal promise or commitment. You need to get it in writing. If the person who dies is married or has children then it is even complicated. If a person dies intestate then you are more likely to have people fighting and bickering over the estate including parents, children and ex-spouses.
If you don’t have a Will, Section 77 of the Administration Act 1969 sets out who is entitled to benefit from your estate. The various situations are covered on the NZ Law website: https://nzlaw.co.nz/the-closing-chapter/what-if-theres-no-Will/
Another reason people delay getting a Will is because they see it as an unnecessary expense - however it is usually more expensive to die without a Will than it is to spend four or five hundred dollars getting things straightened out and in writing before you pass.
Before any assets are distributed under an intestate estate, the lawyer must prove there is no Will or unknown beneficiaries. This involves a lot of investigation which costs time and money. Some of the steps a lawyer has to take (according to NZ Law) include:
- Writing to any previous lawyers and banks the deceased was associated with;
- Writing to the major trust companies to see if they hold a Will: Public Trust, NZ Guardian Trust, Trustees Executors and Perpetual Trust;
- Advertising in the New Zealand Law Society newsletter; Asking the family to search all papers and files of the deceased;
- Finding out if there is a spouse, civil union and/or de facto partner, whether there was a divorce or separation order in existence at the time of death and, if so, obtain a copy of that divorce or separation order. If a surviving spouse, de facto partner or civil union partner applies for Letters of Administration, then consideration will need to be given to election under the Property (Relationships) Act 1976;
- Obtaining full details of all children of the deceased (including any child who died before the deceased and who may have left children of their own). It’s also necessary to go through all papers left behind by the deceased to search for reference to any other children, and to check with any lawyer who was known to act for the deceased;
- Instigating a search of the Births, Deaths and Marriages Register to verify whether there are any other children of the deceased. A certificate needs to be obtained: there’s a fee for this.
- Ascertaining full details of the assets and liabilities of the estate.
Creating a Will might cost you a few hundred dollars now, but not having one can cost your estate thousands of dollars after you pass, due to all the extra research and paperwork required. Therefore, our advice at Aspiring Law is to get a Will – sooner rather than later!
If you have any questions, please don’t hesitate to get in touch with us.