September 2024

Discussing what is to happen after you die can be an awkward topic and something many of us do not want to think about, let alone plan for.

Once you die, everything you own and everything you owe, is called your ‘Estate’, so it’s not just money you need to think about, but all your possessions and debt.

What happens if I die without a will?

Passing away without a will is referred to as dying ‘Intestate’. When this happens, the Administration Act 1969 determines how your assets are to be divided among your family members by setting out an order of priority with rules and limitations around who will get what and how much.

The basic order of priority is:

1. Spouse, civil union partner, or de facto partner.
2. Children, regardless of whether the parents were married.
3. Parents.
4. Brothers and sisters.
5. Grandparents.
6. Uncles and aunts.
7. If none of the above parties exist, the New Zealand Government will receive your property.

The law could determine that:

• if there is a spouse or partner, but no parents or children, the spouse receives your entire estate; or
• if there is a spouse or partner and children, dependent on the value of your estate, some (or all) may pass to your spouse, but some may also go to your children.

The process

When someone dies intestate, your family member (wife, husband, partner or children) cannot touch your estate without the authority from the Court. A member of your family will need to apply to the High Court for permission to be the ‘Administrator’ of your estate. In some instances, the Court will appoint someone to administer your estate, and this may not be the person you would have chosen.

Your estate will be distributed by the Administrator according to a set formula in the Act which could result in your loved ones not being taken care of as you would have wanted. This would not happen if you had a will, as you would have appointed a person of your choice to be your executor(s) to distribute your property to the people who you want to inherit your property according to your instructions and wishes in your will.

Who can make a will?

A person of 18 years or over may make a will. A person under 18 may make a will if they are, or have been, married or in a civil union or de facto relationship. Others under the age of 18 can make a will if given approval by the Family Court or if they are in the military or a seagoing person, join the armed forces for operational service, or join a ship as a seafarer.

When to make a will

Every adult (18 years or older) with more than $15,000 of assets (including savings, KiwiSaver and shares) should have a will. Even if your assets do not exceed $15,000 you should have a will. You may have some money in a savings account, a car, furniture and household items, electronic gaming devices, jewellery etc., that you want to gift to specific family members or friends. Having a will ensures that these items will be gifted according to your wishes.

Things you could include in your will

Your will can include a wide range of instructions, for example:

• your funeral wishes and whether you want to be an organ donor;
• appointing an executor who is the person responsible for applying to the High Court for Probate, collecting all your assets, paying all your debts, carrying out your wishes under your will and dealing with any disputes;
• appointing a Testamentary Guardian to care for your children. Note that Testamentary Guardians are not responsible for the day-to-day care of your child and their role generally ends when the child turns 18 years old;
• gifting of a specific item or amount of money to a charity or friend;
• gifting of shares in a business; or
• dealing with your overseas assets and liabilities, however, depending on the country the assets are held in and the value and the type of these assets, it may be best to have a will in that country.

Once you have a will, it is important to review it regularly and update it when things change in your life such as a change in your financial situation or your relationship status (i.e. if you get married/divorced/separated), a new addition to the family, or if you become in possession of specific family heirloom you want to leave to someone.

Conclusion

Not having a will may result in unintended complications with loved ones not being adequately provided for or persons who you wanted to benefit being excluded. For instance, certain family members, close friends, and charities do not automatically inherit anything under the rules of intestacy.

This legal process can be costly, complicated, time-consuming and not to mention stressful for your loved ones who will already be struggling at this challenging time. If dying intestate results in an unexpected distribution of your assets or one that is perceived to be unfair, it can put pressure on what were, until your death, close and healthy family relationships.

If you die without a will, you may leave your loved ones with a situation that is complex, expensive, time-consuming, and stressful. Save your loved ones time, money, and from stress by making your will today.

Get in touch

Get in touch with your lawyer today for assistance and guidance on preparing a will.