There is a common misconception in New Zealand that if you die without a Will, the government will take all of your assets. This is not quite the case. Take Morgan as an example.
Morgan owns a large life style block, farming equipment, Kiwisaver and other small shares and investments. He has a rocky relationship with his parents but a wonderful wife, Kayla. Tragically Morgan dies in a farm accident. Unfortunately, Morgan dies without a Will. Morgan believed he did not need a Will as he understood that Kayla would inherit all of his assets regardless.
As Morgan did not create a Will expressing his wishes, Kayla now has to apply to the Court for “Letters of Administration”, to have herself appointed as the administrator of Morgan’s estate. She will then need to distribute the assets in accordance with the Administration Act 1969.
This Act sets out that Kayla must distribute Morgan’s assets as follows:
- Kayla is to receive Morgan’s personal effects, $155,000 and 2/3 of the remaining assets in the estate;
- Morgan’s parents are to receive the remaining 1/3 of Morgan’s estate.
Morgan’s parents are thrilled that they get a large distribution from their son (especially because they had such a rocky relationship)! They cannot wait to spend their inheritance.
Kayla however, is left incredibly upset that Morgan’s wish that she inherits all of his assets, had not been followed. She also cannot help but feel angry that Morgan did not make a Will.
It is very important to create a Will to ensure your assets are distributed in a manner you are comfortable with, and that saves your loved ones undertaking the difficult administration process.