What happens if you die without a Will?

It’s often assumed that if you don’t have a Will when you die, your assets will simply go to your next of kin.

While there's some true to this statement, ultimately, it's the Administration Act 1969 that defines how a person’s estate will be distributed if they die without a Will and there are rules and limitations around who gets what and how much. It can be deeply upsetting to see important decisions at the end of a person’s life be made by a legal system rather than their wishes being fulfilled, and this is why it’s so important to have a valid Will.

This article explores the potential outcomes and implications this can have for your loved ones and your assets. 

Intestate Succession

Dying without a Will is referred to as dying "intestate." When this occurs, the Administration Act 1969 outlines a set of rules contained in a table order of priority to determine how your assets and property will be distributed among your surviving family members and who gets what.  

How assets are distributed after you die

If a person’s total assets (i.e., savings, possessions, and KiwiSaver) do not exceed more than $15,000, this is considered a small estate and can sometimes be managed and distributed directly by their next of kin, however, you should seek legal advise in this regard before attending to any distributions. 

If the estate exceeds $15,000 worth of assets in any one place, then formal administration of the estate is required, and is processed according to intestacy laws. This is typically a longer, more costly and complicated process when there is no existing Will. 

How assets are distributed depends on whether the deceased person has a surviving spouse or partner, children, and other close relatives. Here's a brief overview. 

Spouse or Civil Partner's Entitlement 

Generally, the first right to claim a share of your estate is a spouse or partner. In New Zealand the below partnerships can all be recognised as equal to marriage when it comes to estate distribution. 

• Civil partner: A legal relationship between two people that is similar to marriage.
   
• De facto partner: A relationship between two people (regardless of gender) who are both aged over 18 years and are living together as a couple but are not married, or in a civil union with each other.  Other factors such as length of relationship (typically 3+ years), and care of children are also considered when determining a ‘de facto’ relationship. 

However, the partner or spouse do not necessarily take the full benefit of your estate and if you have children, the spouse or partner will likely receive all personal chattels (such as household possessions), a statutory legacy (a fixed sum of money determined under intestacy law) and a third of anything left. The remainder is then shared among the children.  This is on the basis that the partner or spouse elects to take what the Administration Act prescribes. There are other options available to them, in which case they need to seek independent legal advice. 

Children's Entitlement 

Children related by blood are next in line to inherit after a spouse or partner. If there is no surviving spouse or partner, the estate will be distributed equally among the children, regardless of their age or financial situation.  

If a child has died before the deceased person, their share may pass on to their own children (the deceased person's grandchildren). 

Parents' Entitlement 

If you have a partner, but no children but still have living parents, they would receive one third of the residue and the partner the remaining two thirds, together with the initial prescribed amount and the chattels going to the partner or spouse. 

If you don't have a partner or children, your parents might be entitled to your entire estate. Where only one parent is alive, they will inherit the entire estate.  

Distribution to Extended Family 

If you don't have any surviving spouse, civil partner, children, or parents, the intestate rules extend to other relatives, such as siblings, nieces, nephews, and so on. The specific order of inheritance among extended family members is outlined by the Administration Act. 

The Importance of a Will 

Dying without a Will can result in unintended complications. The intestate succession rules may not align with your wishes and potentially leave loved ones without adequate provision or exclude individuals whom you might have wanted to benefit. For instance, close friends, stepchildren, and charities won't automatically inherit anything under the intestate rules. 

Additionally, the absence of a Will can lead to delays in the distribution of your estate, as the legal process of administering an intestate estate can be more complex and time-consuming, not to mention more costly. 

While contemplating one's own mortality can be uncomfortable, it's crucial to consider the financial and emotional well-being of your loved ones after you're gone. Consulting with a legal professional who specialises in Wills and estate administration, such as our team of personal planning experts here at Govett Quilliam, can help you create a comprehensive Will that safeguards your legacy and eases the burden of asset distribution and ensures your wishes are honored and family members are provided for. 

If you have any questions or concerns regarding Wills please contact our Personal Planning Team.