$700k goes to NZ Government following the death of a New Zealander with no Will or traceable family members

A recent case highlighted by the New Zealand Herald highlights the importance of having a Will. The New Zealand Government received almost $700,000 from the deceased’s estate, when they died without a Will and no traceable family members.

The article states that this is the largest sum of ownerless property in New Zealand since 2015.

It is estimated approximately 50% of New Zealand adults don’t have a Will.

Gallie Miles Wills expert and Senior Solicitor Renee Dunn n explains that when someone dies without a Will and has more than $40,000 in assets, such as bank accounts and KiwiSaver the Administration Act 1969 applies. For shares and debentures, the threshold remains at $15,000, after which the Administration Act will also apply if there is no Will.

“Under the Administration Act, a person’s assets are distributed in accordance with the rules set out in the Act,” says Renee.

“For example, if a person dies leaving a spouse and two children, the spouse will not inherit everything. The spouse will generally receive the first $155,000 of the estate, along with one-third of the remaining balance. The two children share the remaining two-thirds equally between them. If the person had no spouse, the estate would instead pass to their children equally. If there were no children, it would go to their parents, and if none survived them, then to siblings, and so on.”

Renee adds, “Because the law dictates how the estate is divided, it can take anywhere from six to 24 months to finalise matters when there is no Will, and family members need to be identified and verified”.

Renee says that when there are no traceable family members, the New Zealand Government may be entitled to the funds, when those family relationships don’t exist.”

“Other people who feel they may have a reasonable case are also allowed to apply for the estate funds depending on the circumstances”.

Renee says that at the end of the day, whatever the circumstances, it is better to have a Will than leave anything to chance.

“Your Will sets out who you would like your executors to be, it provides any specific burial or cremation wishes, records any gifts that you may like to make, and then gives directions to distribute the remainder of your estate (called “residue”) to the beneficiaries you have named in your Will,” she says.

“Losing a loved one is such a difficult time and it can be extremely overwhelming. When there is no Will, it can cause even more stress,” says Renee.

“Our advice is, don’t leave it to chance. It is much easier, cheaper and straight forward, and also less stressful for anyone left behind, if a Will is already in place.”