What are they and why are they necessary?
When you die in NZ and you hold assets over the value of $15,000.00 in one place such as the bank or your KiwiSaver investment, a Grant of Probate or Letters of Administration is necessary to allow the ownership of assets to change and to cash in any assets and distribute them to the beneficiaries.
When you pass away with a valid Will in place, you are deemed to have died testate.
A Will provides specific directions for your executors to follow. This can be especially useful if there are disagreements around what your wishes were as to the disposal of your assets upon your death.
Your Will sets out who you would like your executors to be, it provides any specific burial instructions or wishes, records any gifts that you may like to make during your lifetime, and then gives directions to distribute the remainder of your estate (called “residue”) to the beneficiaries you have named in your Will.
To achieve a grant of Probate, the estate’s solicitor needs to prepare a bundle of documents to submit to the High Court to prove that the Will submitted is the final will of the deceased and is the version that the executors are legally authorised to administer the estate under.
Letters of Administration
When you die without a Will you are deemed to have died intestate.
Dying intestate means that, while the Court process is similar, the terms of the Administration Act 1969 need to be followed.
The Administration Act sets out who can apply to the Courts to be appointed as the administrator of your estate and also contains specific rules as to how your estate should be administered and distributed. There are priority orders of who can apply to be the administrator and there are only certain persons under the Act that can inherit your estate and in certain shares.
Estate administration is a costly and time-consuming process in general but an application for Probate is less so. The cost to make a Will is significantly lower than the additional costs associated with an application for Letters of Administration. It is important that you consider making a Will if you don’t have one or ensuring that you have updated your Will to reflect your current wishes.
If you have any queries or would like to discuss your options, please contact one of our Will drafting specialists today.