Wills & Estates FAQ
Planning for the future can feel overwhelming, but having the right legal documents in place provides peace of mind for you and the people you care about most.
Below, we’ve outlined common language used in wills and answered some of the most common questions people ask about wills, enduring powers of attorney, estate planning, and the probate process in New Zealand.
Legal Terms
Will
A will is a document where you set out how you would like your estate to be divided once you pass away. You can also set out in your will who you want to appoint as your executor(s), who will be the person or persons to gather your assets and distribute them in accordance with what is dictated in your will.
Estate
This is your property and assets that you owned and left behind when you passed away. This can include your home, bank accounts, shares, life insurance proceeds, chattels, heirlooms, vehicles, boats, bitcoin, social media profiles.
Probate
Probate is a Court Order that officially recognises the will as being valid and gives the executors named in the will authority to administer the estate.
To obtain probate an application to the High Court is made. The executor needs to produce the original will to the court and swear an affidavit confirming a number of technical points. Once the Court is satisfied that the will is the last will of the deceased and that the executor is the person (or people) named as executors in the will then the Court will issue the probate.
Different roles explained
Executor
An executor is someone who has been appointed under your will to manage your estate.
Administrator
If you did not have a will, then a person will apply to the court to be the administrator of your estate. Your executor and administrator carry out the same role, in that they manage and administer your estate. The only difference is how they were appointed to the role.
Beneficiary
A beneficiary is the person or persons to whom you are leaving property to under your will. Sometimes your executor or administrator is also a beneficiary, in which case they wear two different hats: one as executor/administrator (the person managing the estate) and one as beneficiary (the person receiving assets from the estate).
How long does it take to wind up an estate?
Winding up an estate can take a considerable time. Most estates of any size will take at least six months, and some can take years depending on what is involved. The reason that estates take so long is that there needs to be some time for people to be able to make a claim on an estate. Claims might be that someone is owed money by the estate, or that a family member has a claim. For that reason an executor or administrator generally will not distribute the estate until six months have passed from the grant of probate, and no claims have been received.
However, for some estates it can be quicker. For example if the assets only consist of money in bank accounts and it is clear that there are no claims to be made against the estate then the estate can often be wound up more quickly.
Although estates can be complicated and slow moving, that does not mean that everything must come to a standstill. An estate can take steps if required and do virtually anything that the deceased did in their lifetime. In particular, an estate can buy and sell assets, run a business and make interim distributions if those are appropriate. All steps taken will need to be agreed to by the executor/administrator.
Once the estate has been fully administered, the residue will either be transferred to the residuary beneficiaries or continue to be held on any trusts that have been established in the will or intestacy.
When can a will be challenged?
A will can sometimes be challenged if a person believes it is invalid or does not properly provide for eligible family members. Challenging a will is a legal process and should be done as soon as possible after the person’s death.
Common reasons a will may be challenged include:
– Concerns that the deceased was pressured or influenced when making the will
doubts about the deceased’s mental capacity at the time the will was signed
– The will was not signed or witnessed correctly
– A close family member or dependent was not adequately provided for
In New Zealand, certain people such as spouses, partners, children, or dependants may be able to make a claim under the Family Protection Act or other legislation.
Because strict time limits apply, it’s important to seek legal advice early to understand your options and next steps if you intend to challenge a will.
Frequently Asked Questions
Legally, anyone can write a will, however many people choose to get guidance from a lawyer when preparing their will. This helps to ensure that the document is legally binding and cannot be easily challenged after the person’s death.
Applying for probate can cost a lot. Some estates are simple enough to be handled by an executor. There is no requirement in NZ that a lawyer needs to prepare a probate application. The Free Probate Applications website helps you prepare an application for grant of probate for free, without needing to pay a lawyer. It is designed for estates that are not complex. More info…
While you are still alive, you are the only person who is entitled to see a copy of the will. You may decide to give a copy of your will to other people, but that is your personal choice.
Once you pass away, your executors will need to see a copy of your will so that they know where your assets are to go. Once probate has been granted, the beneficiaries under your will, banks and other organisations holding your property may also receive a copy of the will.
The first steps usually include obtaining a medical certificate, arranging the funeral, and locating the deceased’s will. You may also need to notify key organisations such as banks and government agencies.
In many cases, jointly owned property passes automatically to the surviving owner. It may not form part of the estate unless ownership was held differently.
Certain people may be able to challenge a will, particularly if they believe they were unfairly left out or the will is invalid. Legal advice should be sought as soon as possible in these situations.
If you do not have a will, then the Administration Act 1969 applies and your assets will be divided in accordance with the Act. More about no will…
A power of attorney (whether it’s an ordinary power of attorney or an enduring power of attorney) automatically ends as soon as the person who made it passes away. This means the attorney no longer has legal authority to: access bank accounts; sell property; make financial decisions; manage affairs on behalf of the deceased. More on PoAs…
The estate must pay outstanding debts, including loans, credit cards, taxes, and funeral expenses, before any assets can be distributed to beneficiaries.
Bank accounts in the deceased’s sole name are usually frozen until probate is granted. Joint accounts may continue to be accessed by the surviving account holder.
In New Zealand, there is generally no inheritance tax. However, the estate may still have tax obligations, such as income tax on earnings during administration.
If you are unsure, a lawyer can assist by making enquiries with local firms or organisations that may have acted for the deceased.