Many newly settled migrants, particularly those who were recently granted a permanent residency, often overlook the importance of having a Will. For some of them, the concept of making a Will is unheard of, and to some extent not a common practice back in their home country.
A Will is a legal document that outlines how personal assets are to be distributed after death. Wills can also identify the persons who the deceased wishes to look after the deceased’s children.
Migrants often spend their lifetime building up their estate and preparing a new life in a new country and yet sadly when they die they unknowingly leaving their assets in the hands of the state.
If a person dies without a Will, the Administration Act 1969 dictates who will receive the assets (also known as the deceased’s estate), unless that person did not have significant assets or held those assets jointly with another person such as a married couple owning their home.
When a person has any asset worth over $15,000 or real estate of any value in his or her own individual name, then this is an asset that requires a Grant of Administration for transfer of ownership when that person dies. This is issued by the High Court of New Zealand.
Assets may include bank or savings accounts, KiwiSaver, a life insurance policy, shares, or any property.
This means anyone (even those who hold work or student visa and have significant savings account in New Zealand) will be in the same position as everyone else if they do not have a Will.
KiwiSaver funds for first home property
Many, if not all, new migrants dream of owning their first home in New Zealand. For first home buyers a KiwiSaver scheme helps them to buy a house (or land). The annual contribution of the government plus their employer’s contribution makes this scheme a great way to kick start saving money for a mortgage deposit.
By the time these first home buyers are eligible to purchase their first home, the KiwiSaver funds are normally their most significant asset. And since Kiwisaver accounts are always held in a person’s individual name, if they have $15,000 or more in KiwiSaver accounts that person will be required to apply for a Letter of Administration (if you don’t have a Will) or Probate (if you have a Will) in order to access the KiwiSaver funds.
What happens when you don’t have a Will?
If the estate has assets more than $15,000 and you don’t have a Will, someone needs to apply to the Court to be the administrator of the estate.
The procedure for obtaining a grant of administration (Letters of Administration) is more complicated and expensive and takes longer if the deceased did not have a Will. The person entitled to apply to administer the estate is decided by the Administration Act 1969 and may not be the person who the deceased wanted to deal with the estate. This can be a significant problem, particularly when the deceased has a family from more than one relationship.
When the Letter of Administration has been granted, only then the administrator will be able to request the bank or KiwiSaver provider to have deceased’s money/funds released.
Also bear in mind that all the assets do not automatically go to the surviving spouse or partner unless held jointly. There is a limit on what a partner or spouse may receive. In some instances, people are surprised when they find out that part of the estate goes to their in-laws. The Administration Act 1969 provides the formula on who gets what, and how much.
Are Will kits in the shops effective?
Nowadays, anyone can find a ready-made form for drawing up their own Will, either online or in major stationery shops. These Will kits appear to be a cost effective option instead of asking a lawyer to prepare the Will. However, the cost of getting a lawyer to draw up the Will is relatively small, especially compared with what can go wrong if a Will is drafted poorly.
If the Will is unclear or ambiguous in nature, or if it hasn’t been signed and witnessed properly there could be a lot of headaches for family and friends. It often ends up costing thousands of dollars if the High Court has to interpret or rectify the Will when the estate needs to be administered.
If you’re uncertain on how to make your Will, you may contact Oneal Mendoza or one of our lawyers to assist you.
This article is published for general information purposes only. Legal content in this article is necessarily of a general nature and should not be relied upon as legal advice