When there is no will
It’s hard to know where to start when you’ve lost a loved one. It can be even more stressful when there is no will.
When someone passes away and a will hasn’t been left, it’s called dying ‘intestate’. In this situation, the law determines who will inherit their property and possessions. There is a formal process that must be followed to wind up the estate. Public Trust can help guide you through that process.
Here are the steps to take to settle the estate.
Is the estate small?
A small estate has no property or assets worth more than $15,000 in any one category (such as cash, shares, KiwiSaver, bonds or managed funds).
If yes, the next of kin can manage the administration and distribution of the estate themselves.
If no, continue to step 2.
If the estate has assets worth more than $15,000 in any one category (such as cash, shares, KiwiSaver, bonds or managed funds) or has property, someone needs to apply to the Court to be the administrator of the estate.
What is an administrator?
An administrator is responsible for administering the estate (closing accounts, filing tax returns, selling property) and distributing the estate. This is similar to what an executor does if there is a will in place.
Who can be an administrator?
A family member or friend of the deceased can be the administrator of the estate. Acting as the administrator is a big responsibility. It can be a stressful and sometimes complicated process. You need to
pick someone who;
- can act impartially to make the right decisions.
- understands the legal responsibilities.
- has the time to do it properly.
- can manage family disagreements when they arise.
- has a good understanding of business, law, accounting, and tax.
If you choose to be the administrator of the estate, Public Trust can assist you with fulfilling your duties. Alternatively, Public Trust can act as administrator for you.
Whether you choose to be the administrator of the estate or ask Public Trust to act for you, the chosen administrator will need to obtain Court authority to act. To do this, they need to prepare and file an application to the High Court to be granted letters of administration, which gives them the authority to deal with the assets of the estate.
To prepare the letters of administration, the following must be demonstrated to the Court, which can take a considerable amount of time:
- There is agreement about who will be the administrator
The administrator must have consent to act from all those who had the same level of relationship with the deceased (such as the administrator’s siblings) or a closer relationship (such as the deceased’s partner). If Public Trust is appointed administrator, we need the consent of the closest relative(s) to the deceased to act.
- Steps have been taken to find a will
The Court needs to be satisfied that there is no will, so you need to show the steps you have taken to find the will. This may include advertising for someone to come forward with the will, contacting professionals that may have the will and asking people who were close to the deceased if they have it.
- There is proof of the deceased’s family relationships
You need to prove the key beneficiaries’ relationships to the deceased and show that all children have been accounted for.
Once the letters of administration are granted, the administrator can take care of the paperwork, close accounts, sell property, settle debts, pay taxes and so on.
As there is no will, the estate is distributed according to the law. There is an order of priority for who gets what and how much.
Who benefits from the estate?
If there is a spouse or partner, but no parents or children:
The spouse receives the entire estate.
If there is a spouse or partner and children:
The spouse receives the personal effects (such as furniture, paintings, homeware), $155,000 (with interest from the date of death) and a third of anything left. Children will receive the remaining two thirds, divided equally between them.
If there are stepchildren or a blended family:
Where there are blended families the situation is more complex. Whether stepchildren are entitled to benefit from an estate will depend on a number of factors including the age of the stepchildren, their relationship to the deceased and whether they relied on the deceased financially. To fully understand stepchildren’s entitlements you should make an appointment to see your nearest Public Trust adviser.
If there is a spouse or partner and parents, but no children:
The spouse receives the personal effects (such as furniture, paintings, homeware), $155,000 (with interest from the date of death) and two thirds of anything that’s left. The deceased’s parents will receive the remaining third divided equally amongst them.
If there are children but no spouse or partner:
The children receive the entire estate; it will be shared equally among them.
If there is no spouse or partner, no children, but there are surviving parents:
The entire estate is divided equally between the parent or parents.
If there is no spouse or partner, no children, no surviving parents but surviving siblings:
The entire estate is divided equally between the siblings.
None of the above:
A genealogist will be engaged to determine next of kin details. If no next of kin are able to be located then everything will be passed over to the NZ Government.. Anyone who thought they should have benefited from the estate can apply to the New Zealand Treasury to be considered.
How long will it take?
When there isn’t a will in place, the process of winding up the estate can take a lot longer than if a will is in place. As a guideline, and depending on the complexity of the estate, it can take anywhere from 6 – 24 months to administer the estate.