Dying without a Will in New Zealand can cause your family quite a headache! Without a will your Estate is divided arbitrarily in accordance with the Administration Act 1969 (“the Act”). You lose the ability to control who should inherit your assets – which are collectively referred to as your Estate. Families often look different today to how they did in 1969. The Act is useful as a last resort, but it doesn’t take into account your wishes, the intended passage of family heirlooms, the differing relationships you have with loved ones, and any charitable gifts you may wish to make.
Your next of kin will be required in most cases to apply to the Court to administer your Estate either way but there are additional steps and requirements when you don’t leave a Will. Instead of a Grant of Probate your next of Kin (who may not be who you would appoint to administer your Estate would be required to apply for Letters of Administration. An application for Letters of Administration requires a thorough search for any Will you might have made and searches for any additional beneficiaries. These both mean extra costs for your Estate. Once the application is granted the applicant is then referred to as your Administrator. The Act specifies that if you are survived by certain relatives they inherit in a listed order of priority and often receive a set share of your Estate. Your Administrator has no choice. This can lead to disagreement between family members. One instance where such arbitrary division can cause an issue is where you are survived by your spouse and children. Generally, in that case your spouse receives your personal chattels, and a prescribed share of your Estate, while your children receive the balance. This can be hard on a surviving spouse who then has to forgo a share of your assets that would otherwise have supported them during your life. That share of the assets is then required to be held for your children if they have not yet reached the age of majority. This can create complicated scenarios where not all assets are jointly owned.
Something many people do not realise is that if you die intestate with no surviving relatives your Estate is given to the Crown – the New Zealand Government. In light of this, many people might prefer to leave their Estate to a friend or a charity, where they feel it could do good.
Ultimately, dying without a Will leaves you and your family with no say in how your assets are shared between them producing a result you may not have intended. All of this can be avoided by making even a simple Will which can reduce the stress for your family at an already challenging time.
Disclaimer: The content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose. We do not give financial, taxation or investment advice and nothing in this article is intended as such.