Kiwilaw's Guide to Estate Administration - where there's a will, and a grant of probate (Jan 2023)

Kiwilaw’s guide to estate administrationwhere there’s a will, and a grant of probate

Cheryl Simes v. 1.3 – January 2023

© Cheryl Simes (Kiwilaw), January 2023 Kiwilaw Probate and Estates Ltd, P O Box 85, Oxford 7443, New Zealand https://kiwilaw.co.nz mailto:probate@kiwilaw.co.nz

This guide is provided in good faith to assist executors to understand their role, and to help them understand the need for more detailed guidance and assistance when appropriate. It should not be relied on as a substitute for professional research or advice.

Although reasonable care has been taken to provide accurate information, there may be errors and omissions. No liability is accepted for any such errors or omissions.

The reader is strongly encouraged to check their understanding and intended actions with an appropriate professional adviser.

If any errors or omissions are identified, the reader is asked to notify Kiwilaw in order to improve the next edition.

Contents Factual scenario ...................................................................................................................................... 1 As executor and trustee, what are Tom’s main jobs? ............................................................................ 2 Understand the will and do what it says ............................................................................................ 2 Sort out the property – initial steps .................................................................................................... 2 Finalise everything – but not too soon ............................................................................................... 3 Information for the High Court ........................................................................................................... 4 Duties of the executor/s ......................................................................................................................... 5 Understanding the will – it may not mean what it appears to say ......................................................... 6 Did someone witness the will who is also a beneficiary of the will? .................................................. 6 Was the will made before the deceased separated or got divorced? ................................................ 7 Was the will made before the deceased got married?....................................................................... 7 Does the specific property still exist? ................................................................................................. 7 Has a child died, leaving children of their own? ................................................................................. 8 A killer cannot inherit.......................................................................................................................... 8 What happens if a gift fails, or if something is not covered by the will? ............................................ 8 Does the will appear to include property that, in fact, is not part of Hine’s estate? ......................... 9 Whose law applies? ............................................................................................................................ 9 Māori land – gifts are restricted ......................................................................................................... 9 Unnamed ‘children’ do not usually include foster children, whangai, or stepchildren.................... 10 Has the surviving spouse (or partner) been given a fair share? ....................................................... 10 What rights and powers does the executor/trustee have? .............................................................. 11 How Tom can transfer assets into the name of the estate .................................................................. 12 Kiwisaver, insurance policies, and other financial investments ....................................................... 12 Sell or transfer company shares or other securities ......................................................................... 13 The family home – joint tenancy, or tenants in common? ............................................................... 14 ‘Joint tenants’ – it’s not about cannabis ....................................................................................... 14 ‘Tenants in common’ – it’s not about renting .............................................................................. 16 BUT… Hine is Māori – the Māori Land Court can do the succession, instead of using the land transfer system – even for general land ........................................................................................... 17 Hine’s separate rental property ........................................................................................................ 17 Māori land ......................................................................................................................................... 19

Overseas assets ................................................................................................................................. 20 Claims against estates ........................................................................................................................... 22 ‘The will was not made by the truly voluntary act of the will-maker.’ ............................................. 22 ‘I am a close family member who was entitled to more.’ ................................................................ 22 ‘I was promised more because of the services I provided to the will-maker.’ ................................. 23 ‘The will-maker changed their will after promising mum/dad that they would not.’ ...................... 23 ‘The will-maker wronged me or failed to pay me.’........................................................................... 24 Changing the will................................................................................................................................... 25 Disclaimer – refusal of a gift ............................................................................................................. 25 Deed of family arrangement – agreement to change what happens............................................... 25 Missing beneficiary ............................................................................................................................... 26 Missing creditor .................................................................................................................................... 27 Disputes and disagreements ................................................................................................................. 28 Grief .................................................................................................................................................. 28 Proceed with caution ........................................................................................................................ 28 Suggested approach to resolving disputes ....................................................................................... 29 How to train your lawyer ...................................................................................................................... 31 Full representation............................................................................................................................ 32 Unbundled services ........................................................................................................................... 33 Lawyers’ obligations – brief summary .............................................................................................. 34 Resources .............................................................................................................................................. 35 Legal advisers .................................................................................................................................... 35 Dispute resolution............................................................................................................................. 35 Free online information .................................................................................................................... 35 Recommended reading ......................................................................................................................... 35 Grief and resilience ........................................................................................................................... 35 Communication, negotiation ............................................................................................................ 36 Legal texts ......................................................................................................................................... 36

Factual scenario Hine1 passed away in February.

Her husband, Tom, is named as the executor2 in Hine’s will.

Tom has already cancelled Hine’s driver’s licence and passport and notified Work and Income.

He also checked government websites for advice about what else needed to be done.

https://www.govt.nz/browse/family-andwhanau/death-and-bereavement/

Tom is applying for a grant of probate from the High Court – he knows this is required because Hine had more than $15,000 in investments, plus a rental property. (Naturally, he is using Kiwilaw’s costeffective probate service!)

Hine’s will left specific property to her (adult) children, a legacy (gift of money) to her favourite charity, and specific bequests (gifts of objects) to nieces and nephews and special friends. She left everything else to Tom. There is more than enough money in the estate to pay all of Hine’s outstanding debts and the estate expenses.

1

All names and scenarios are fictitious. All photos are from stock images (mostly Getty Images) or taken by the author.

2 Executor = the person who is legally responsible for carrying out what the will says. Also the trustee of the deceased’s property until it is finally distributed to the beneficiaries.

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DOES TOM NEED A LAWYER, TO DO THE ESTATE ADMINISTRATION? Not necessarily.

Even if he needs some legal advice and assistance, he does not have to do everything through a lawyer. (See page 31.)

He can choose how much to do himself, and how much to pay a lawyer to do.

If he does need professional help, he may decide to use the Public Trust’s ‘Executor Assist’ service, an accountant, a valuer, and/or a lawyer, depending on the type of support he needs.

If there is conflict or criticism, or if he lacks the necessary skill set, confidence, or time, he is recommended to do everything through a lawyer.

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As executor and trustee, what are Tom’s main jobs?

Understand the will and do what it says 

Be sure he understands the will accurately. Check this with a lawyer if necessary. See pages 6-11.



Identify, locate and notify the beneficiaries (those who are given something under the will). See pages 6-11, 24.



Notify anyone else who has a role under the will – for instance, ‘testamentary guardian’ for children, or care of Hine’s pets.

Sort out the property – initial steps 

Locate anything that Hine owned – her assets. Make a list.



Ask any financial institutions that might hold anything, if he is not sure. (Include the TAB – TAB accounts are often used to ‘hide’ money, with no upper limit. Also, did Hine make advance payments to a dentist, vet, power company, etc?

Was she a shareholder in a co-operative such as Farmlands?)



Ensure everything is safe in the meantime.



Find out whether anyone owed Hine any money. Make a list.

Collect it (or otherwise sort it out).



Pay the funeral costs.



Identify Hine’s unpaid debts. Make a list. Pay them, or arrange with creditors to delay payment while he sorts out the estate. Sort out any disputed debts.



When he receives probate, transfer the assets into the name of the estate. See pages 12-19.



If the estate is going to receive income, or if there is general land that is due to be transferred to Hine (perhaps from her mother’s estate), apply for an IRD number for the estate.



Claim Hine’s tax refund, if one is due



Pay any tax owed by Hine to Inland Revenue



Reimburse himself and anyone else for debts paid for the estate in the meantime – for instance, funeral expenses, legal fees, other creditors.



Action gifts of specific items under the will, as long as this leaves enough assets to pay any bills or possible claims against the estate.



Decide whether property is to be sold or will eventually be transferred to beneficiaries.



If property is to be sold, make appropriate arrangements.



Discuss with beneficiaries any proposed changes to the terms of the will. See page 23.



Keep records of all payments made, items sold, money received, and any items given to beneficiaries.

Finalise everything – but not too soon 

Optionally – Tom can advertise for any claims or creditors, under the Trustee Act 1956 s 35. If no claims are made or notified, he can distribute the estate. (A subsequent successful claimant may still recover from the beneficiary, but not from Tom as executor. Otherwise an outstanding claim may be made 6 years later and Tom will be liable if he has already distributed the estate.)



If anyone has given notice of a possible claim against the estate, wait 3 months after receiving that notice. Take further steps depending on the nature of the possible claim.

See pages 20-22, 26-27.



No beneficiary can require payment earlier than 12 months after Hine’s death. However, Tom may pay legacies and transfer land within the year, provided he is satisfied there are sufficient assets and no claims pending against the estate which might turn these into overpayments.

ESTATES THAT CANNOT BE WOUND UP QUICKLY Sometimes a will includes provisions that cannot be implemented immediately .

Maybe children are not yet old enough to receive their share.

Maybe someone has a ‘life interest’ in some or all of the estate property.

The executor has to ensure this is monitored, managed, and appropriately implemented.

In these situations, using a lawyer or the Public Trust is strongly recommended.

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

If Tom himself is the main beneficiary, he may choose to finish things off quickly and take the risk of a subsequent claim being made which – if successful – he would have to meet from his own resources.



Check whether Inland Revenue needs a final tax return



Calculate each Confirm that each calculation.

beneficiary’s entitlement. beneficiary agrees with this



Ensure all debts, tax, and been paid.

legal and accounting fees have



Finalise any land and share transfers, including Māori land succession to beneficiaries, and transfers of shares in Māori incorporations.



Check that everything is properly documented and accounted for. Usually this is done in a summary accounting statement.



Pay the beneficiaries their shares as specified in the will.



Ensure the distributions can be proved – use internet banking, or cheques, or obtain a receipt from the beneficiary.



Close the estate’s bank account.

Information for the High Court In the affidavit which accompanied his application for probate, Tom promised that he would, if called upon, provide this information to the High Court.

However, it is unusual for the High Court to make an order requiring an inventory of assets or other estate accounts. Such an order can be made on an application by any person interested. The court has 3 years from when probate is granted, to make such an order.

Tom may at any time voluntarily provide the High Court with an inventory of the estate’s assets.

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Duties of the executor/s If there is more than one executor, they must act jointly – making decisions together, not separately.

They must be even-handed, not favouring one beneficiary or class of beneficiary over another.

They must comply with the law, and with what the will specifies.

More details are available from professional advisers.

The Trusts Act 2019 came into effect in January 2021. Most of the rules affecting executors stayed the same. One change was that they must now actively provide more information to beneficiaries.

In most families, communication issues can be resolved without needing legal intervention. If that is not working, executors should seek legal advice sooner rather than later, to ensure they comply with their obligations to all parties.

Nevill’s Law of Trusts, Wills and Administration (13th edn, 2019) – table of contents

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Understanding the will – it may not mean what it appears to say Some legal rules can alter the effect of a will. Those that follow are only some of them.

If in any doubt at all, Tom should get legal advice.

Did someone witness the will who is also a beneficiary of the will?

A witness to the will cannot be a beneficiary of the will – unless EITHER the other beneficiaries agree OR the High Court allows it.

The same applies if the witness’s spouse, civil union partner or de facto partner is a beneficiary of the will.

The gift lapses, unless the other beneficiaries agree to keep the gift in place or the High Court allows it.

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Was the will made before the deceased separated or got divorced?

Hine’s will leaves everything to her husband, Tom. Hine and Tom were happily married until Hine’s death.

However, if Hine and Tom’s marriage had in fact been dissolved since she made the will, her gift to Tom would fail.

Similarly, if they had separated since the will was made, with a separation order in place, the gift would fail. However, if they had separated but without a separation order or a dissolution order, the gift would still be valid.

That rule only applies to marriages and civil unions. It also applies only to the gift to the former spouse, not to gifts to anyone else. It can be overridden by the High Court or by the agreement of the other beneficiaries.

If they separate or divorce before the will is made, the gift is still valid.

Was the will made before the deceased got married?

If Hine’s will had been made before she even met Tom, let alone married him, her whole will would be invalid.

A will made before marriage is invalid unless it is made in contemplation of that marriage.

(This point is checked by Kiwilaw as part of the online interview for the probate application, so it should not arise at this stage. If it has somehow slipped through, probate will need to be recalled, and letters of administration will be needed instead. Legal advice should be sought.)

Does the specific property still exist?

If Hine’s will left a ‘house in Auckland’ (described as such in the will) to her daughter, but Hine had since sold that house and bought a different one in Taupo without updating her will, that gift would fail.

The house in Taupo would become part of Hine’s residuary estate. It would not go to the daughter.

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Similarly, if she left her ‘ANZ Kiwisaver’ (described as such in the will) to her son, but had since transferred everything from ANZ Kiwisaver to Simplicity Kiwisaver without updating her will, that gift would also fail. The SImplicity Kiwisaver would become part of her residuary estate. It would not go to her son.

A gift of specific property applies only to that property, not to something else that replaces it, unless the will states that it applies to any replacement property.

The other beneficiaries can potentially agree to vary the will so that the daughter/son still gets something. See page 23. The daughter/son could also potentially claim under the Family Protection Act. See page 20.

Has a child died, leaving children of their own?

Hine’s will leaves her ‘rental property in Rotorua’ to her children, in equal shares. She had three children, but one (Maria) died two years ago.

Maria’s share automatically goes to Maria’s two children (Tane and Jenny), even though Hine’s will does not expressly state this.

This rule applies unless the will expressly says something different.

A killer cannot inherit If the death was the result of homicide, any gifts to the killer are invalid.

What happens if a gift fails, or if something is not covered by the will?

A will usually has a clause that deals with everything that is not otherwise specified. Sometimes this is called the ‘residuary estate’. That clause should specify who gets everything that is left.

If there is no such clause, or if the specified beneficiary is already dead (with no back-up beneficiaries either specified in the will or implied by law) or is otherwise excluded by a rule of law,

the same rules apply that would apply if there were no will.

The executor should either research this themselves or – preferably - obtain specific legal advice.

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Does the will appear to include property that, in fact, is not part of Hine’s estate?

If Hine owned her home jointly with Tom (as joint tenants)3, her share passes automatically to Tom without being part of her will. Even if her will said she left her share of the house to someone else (such as her children), that would not apply.

The same principle applies to joint bank accounts and jointly owned shares.

Sometimes property has been transferred to a family trust but without the will being updated.

Property that is owned by a family trust no longer comes under a will.

Maybe Hine owns a company through which she runs a business. Assets owned by the company are not Hine’s property and are not covered by her will. (Her shares in the company are her property and are covered by her will. She cannot, however, leave a company vehicle to somebody in her will.)

Specific legal advice should be sought if such issues arise.

Whose law applies?

To deal with ‘immovables’ - land or buildings - in New Zealand, the will must be made validly according to New Zealand law. It does not matter where the will-maker was living or where the will was made.

To deal with ‘immovables’ overseas, the will must be made validly according to the law of the place where the ‘immovables’ (land or buildings) are. Again, it does not matter where the will-maker was living or where the will was made.

In contrast, to deal with other types of New Zealand property (‘movables’) - including money – the will must be valid according to the law (a) where the will was signed, or (b) where the will-maker was ‘domiciled’ when the will was signed, or (c) where the will-maker was ‘domiciled’ at the time of death, or (d) (if the will was made outside New Zealand) the will-maker’s ‘domicile of origin’.

‘Domicile’ is a specific legal concept that broadly means a person’s permanent home base.

Specific legal advice should be sought if such issues arise.

Māori land – gifts are restricted If Hine left her shares in Māori land (including Māori incorporations) to Tom, this gift would fail unless Tom was a member of the hapu associated with the land.

A surviving spouse or de facto partner who is not a member of the relevant hapu may be left a life interest in the income from the land.

Anyone else who is not a member of the relevant hapu may not be left even a life interest.

3

See page 15 below.

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Unnamed ‘children’ do not usually include foster children, whangai, or stepchildren If Hine left her property to be divided equally among her ‘children’, without naming them, this would normally exclude any foster children, ‘Home for Life’ children, whangai, and stepchildren.

However, they can be included if there is strong evidence that Hine used the word ‘my children’ to include those others, or if everyone agrees.

Has the surviving spouse (or partner) been given a fair share?

If Hine had (a) owned more than half of Tom and Hine’s total property and investments, in her name; and (b) left most of it to someone other than Tom, Tom could choose to take his entitlement under the law of relationship property instead of under the law of inheritance.

If the will lets them down, the surviving spouse/partner is entitled to a division of the couple’s total property, so that the survivor gets their legal share under the Relationship (Property) Act. If Tom chose that option, he would no longer receive what he was given in the will. Instead, he would sign a ‘notice of choice of option by surviving spouse’ and then make a relationship-property claim.

However, unless the High Court decides otherwise, he could only do this within 6 months after probate was granted; otherwise he would be treated in law as having chosen to take his entitlement under the will.

This provision was introduced to ensure someone who stayed in a marriage (or civil union, or de facto relationship) was no worse off financially when their spouse/partner died than if they had separated.

Where there is a will, it only becomes relevant if the deceased spouse owned most of the relationship property and the will does not give the surviving spouse enough to bring their share of the total relationship property up to at least half.

If this is a relevant issue, the executor, surviving spouse/partner, and other beneficiaries will need their own separate legal advice.

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What rights and powers does the executor/trustee have?

The will may set out some powers, and others are implied by law (such as the Trustee Act).

The executor becomes a trustee once the property is held by the executor and before it is distributed to the beneficiaries. The law of trustees applies, as well as the law of executors.

If specific issues arise, discuss this with a lawyer early on – even if you have already read the legal textbooks (see photo below). This is one aspect where it is particularly stupid to skimp on legal advice and ‘do it yourself’.

Kiwilaw’s younger collie would have preferred a game, rather than all those law books about wills, trusts, and estates that his owner was trying to photograph for this page.

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How Tom can transfer assets into the name of the estate 

Open a bank account in the name of the estate (or instruct a professional and use their trust account), and have money paid into that account from other banks, insurance policies, Kiwisaver, etc. (See below.)



Sell any items that are not going direct to beneficiaries. Keep records of this. Put the proceeds into the estate account.



Sell shares, or have them transferred to the executors until the estate is wound up, or transfer them direct to the beneficiaries. See page 13.



For general land (including a house), register a transmission to executor or apply to the Māori Land Court for a vesting order. See pages 15-17.



For Māori land, apply for an order vesting the Māori land shares in him as executor, especially if it will be some time before the estate can be wound up. Notify whoever is administering the land, to ensure that payments go to the estate bank account and notices go to the executor.

Kiwisaver, insurance policies, and other financial investments Once probate is granted, Tom can use the probate document to open a bank account in the name of Hine’s estate, or to change her existing bank account into the name of the estate, or to close the account and pay the funds elsewhere.

The bank will require Tom to complete some forms and provide identification, as well as the probate document.

Tom also contacts Hine’s Kiwisaver provider.

They will require him to fill in a claim form and provide a certified copy of probate, plus details of the estate bank account.

Insurance companies have similar procedures.

An insurance policy is only part of Hine’s estate if it does not name someone else as the holder of the insurance policy. The insurance company will check this and should be able to explain this clearly to Tom.

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Sell or transfer company shares or other securities

It’s not necessary to use a sharebroker to transfer shares to beneficiaries. That can be done by an off-market transfer. The shares can be transferred direct from the deceased’s name to the beneficiaries, without a transmission to the executor/s first. Download the relevant off-market transfer form from the relevant share registry (Link Market Services Ltd or Computershare Investor Services Ltd).

Shares can also be sold on behalf of the estate, or put into the executors’ names (on behalf of the estate), until the estate is wound up.

Link Market Services has a downloadable ‘Estate Administration Guide’ with more information about managing share holdings in a deceased estate.4 Link will also do all the required transfers for multiple share holdings in an estate for a flat fee of $92.

Computershare (NZ)’s website appears less helpful than Link’s.

Both have downloadable forms, plus contact details, to help executors sell, transfer, or buy shares on behalf of an estate.

Note – jointly-owned shares are technically not part of the estate because, in law, they simply pass to the surviving owner. They need to be put into the survivor’s name by a transmission – this is the same terminology as is used for land, but is a different process done through a share registry.

4

https://www.linkmarketservices.co.nz/downloads/Estate_Administration_Guide.pdf

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The family home – joint tenancy, or tenants in common?

Tom knows that the family home is in both their names. He cannot remember whether it is a ‘joint tenancy’ or ‘tenancy in common’.

He needs to check the exact wording.

For that, he needs a copy of the record of title (previously called ‘certificate of title’).

He can get this himself online – through Land Record Search (provided by Toitū Te Whenua | Land Information New Zealand (LINZ)). Usually that costs $6.00.

(Alternatively, he can ask Kiwilaw to do the search and provide him with the analysis, for just $28.75 including the search fee, GST, legal advice, and a copy of the current title.)

‘Joint tenants’ – it’s not about cannabis If the land title says the owners are ‘Tom and Hine’, with nothing about any shares, then they own it as ‘joint tenants’.

Hine’s share is not part of Hine’s ‘estate’ under her will. It goes to Tom by ‘survivorship’.

Even if there are claims against Hine’s estate, her share of the house is not affected. It still goes straight to Tom. In a joint tenancy, Tom needs to organise a ‘transmission by survivorship’ through LINZ.

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He does not need probate first. He does need Hine’s death certificate. He needs to make a statutory declaration to support the application for transmission.

He can do it himself by researching it from the LINZ website and presenting a ‘manual dealing’. The LINZ fee for registering the transmission is $180.5 Alternatively, he can instruct a lawyer (including Kiwilaw), or a conveyancer, or Public Trust’s ‘Executor Assist’ service to do it for him.

He needs to ensure a notice of change of ownership is provided to the local and regional councils. The lawyer, conveyancer, or Public Trust should do this on Tom’s behalf.

If he is doing the transmission himself, Tom will need to do the notice for the councils. (Auckland Council has an online form for this. Wellington does not. Other council websites have not been checked.)

Kiwilaw charges $400 for a transmission (which includes GST, the LINZ fee of $90, title searches, a copy of the new title once the transmission has been registered, and notification to local and regional councils). A bit more if there is more than one surviving owner or more than one title.

5

An electronic registration (‘edealing’) through Landonline has a lower fee ($90 instead of $180) – but edealing is not directly available to the public.

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‘Tenants in common’ – it’s not about renting

If the land title says Tom owns a ½ share and Hine owns a ½ share (or other specified shares), then they own it as ‘tenants in common’. (The example above has ⅔ and ⅓ shares.)

Hine’s share is part of her estate under her will. Probate is needed before it can be transferred to anyone under her will (or sold).

In a tenancy in common, Tom usually needs to organise a ‘transmission to executor’ through LINZ, using probate as evidence. He needs to make a statutory declaration to support this. (But see below – ‘deceased is Māori’.)

Unless he is selling the house, he will also need a ‘transfer’ to the beneficiary under Hine’s will, even if that is Tom himself. provide tax information about the beneficiaries, before the transfer can be registered. (Tax is not charged on the transaction, but information is still collected for Inland Revenue.)

Again, he can do this himself by researching it from the LINZ website and lodging a ‘manual dealing’, or he can instruct Kiwilaw or another professional to do it for him. Again, the LINZ fee for this manual dealing is $180 for the transmission and another $180 for the transfer.

Kiwilaw charges $400 for a transmission, and $380 for a transfer to beneficiaries (which includes GST, the LINZ fee of $90, title searches, a copy of the new title once the transmission/transfer has been registered, and notification to local and regional councils). A bit more for more than 1 title and more than 2 signatories.

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Again, he needs to ensure a notice of change of ownership is provided to the local and regional councils. The lawyer, conveyancer, or Public Trust should do this on Tom’s behalf.

If he is doing the transmission himself, Tom will need to do the notice for the councils.

(Auckland Council has an online form for this. Wellington does not. Other council websites have not been checked.)

BUT… Hine is Māori – the Māori Land Court can do the succession, instead of using the land transfer system – even for general land Hine is Māori.

Hine’s executor (Tom) can opt out of the land transfer system and, instead, use the Māori Land Court. He does not have to register a transmission to executor.

He can make an application under section 111 of Te Ture Whenua Māori Act 1993 for an order vesting general land owned by Hine in himself as executor (if it is not yet appropriate to transfer it to himself as beneficiary).

He can also make an application under s111 for an order vesting general land in himself as the beneficiary under Hine’s will.

The Māori Court filing fee is $60.

The Māori Land Court can process that with Tom’s application for succession to Hine’s Māori land interests, or it can be done separately.

If the s111 order is made, the Māori Land Court registry sends it to LINZ to update the general land register. There is no fee for this.

The Māori Land Court Rules explain more of what is required. At this stage there is no specific application form for a s111 application.

It will take longer to process than using the land transfer system, but it may cost significantly less.

Tom would be wise to ask the Māori Land Court registry about processing times before making a decision.

Hine’s separate rental property Hine’s will leaves her ‘rental property in Rotorua’ to her children.

She owns one house in Rotorua, which is tenanted. She is the sole registered owner. It is general land (not Māori freehold land).

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One child – Maria – died before her. Maria’s share should be divided between Maria’s two children – see page 8 above. (Note, however, that one child cannot be found – see page 24.)

Tom needs to decide whether to use the land transfer system or whether to use the Māori Land Court.

If he decides the use the land transfer system, he will start by registering a ‘transmission to

executor’. (See above, page 16.) If he decides to use the Māori Land Court, he will apply for a s111 order to vest the property in himself as executor. (See above, page 17.)

He will need to discuss with the beneficiaries whether they want the property itself transferred to them, or whether it should be sold and the net proceeds paid to them.

Unless the will specifies otherwise, he has the power to decide to sell the property even if the beneficiaries do not agree.

He needs to ensure appropriate notice is provided to the tenants. As executor, he also needs to ensure he meets all his obligations as landlord. https://www.tenancy.govt.nz

If there is a mortgage against the property, the property comes with the mortgage debt unless Hine’s will specifies that the mortgage is to be paid off from the rest of her estate. If the property is sold, the mortgage will be repaid from the proceeds of sale, and the beneficiaries will only receive the net equity. If the property itself is to be transferred to them rather than being sold, the beneficiaries will have to refinance that debt.

No final transfer to beneficiaries - or payout (distribution) of the proceeds of sale – should occur until it is clear there are no unresolved claims against the estate.

If the property is to be sold on the open market, that must be done through the land transfer system.

If the property is to be transferred to the beneficiaries as specified in Hine’s will, that can be done through the land transfer system OR by a s111 order in the Māori Land Court (see page 17 above).

If the property is to be transferred to Hine’s whanau trust, or to one of the beneficiaries rather than all of them as under the will, that must be done through the land transfer system. A s111 order cannot be used to vary what is in the will.

However, if the property is going to a whanau trust or is otherwise intended to stay in the family, or is being sold to someone who wants it to be Māori freehold land, Tom or the beneficiaries may apply to the Māori Land Court under s133 for a status order to change it from general land to Māori freehold land. If the Māori Land Court agrees, appropriate vesting or succession orders can then be made by the Māori Land Court rather than needing to use the land transfer system.

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Regardless of which procedural path is taken, Tom will need to keep careful accounts of any income and expenditure from the rental property in the meantime, and account for it in Hine’s final tax return (or annual tax returns, if extended over more than a year).

Māori land Tom has the job of ensuring that Hine’s shares are transferred to the right people.

Once he has probate, he can apply for an order vesting her shares in him as executor. If he does that, he needs to apply later for a succession order, transferring the shares to the appropriate beneficiaries.

It is not compulsory to obtain an order vesting the shares in the executor before obtaining a succession order.

Tom needs to research Hine’s land

holdings. 

He can search the Māori Land Online database to see the current listing of shares held by Hine.



He should request a ‘Part IV search’ from the Māori Land Court to confirm her holdings.



He can also research previous succession orders by visiting a Māori Land Court office to use the more detailed Māori Land Information System (not available on the internet).

However, although Hine’s will provides for her Māori land shares to go to Tom (because they are part of her residuary estate – the property that she does not give to anyone else specifically), there could be a problem here.

By law, Hine’s Māori land shares cannot go to Tom unless Tom belongs to a ‘preferred class of alienee’ –

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usually a member of the hapu associated with the specific land blocks.6

If he qualifies, he will provide relevant information in the application to the Māori Land Court, and the succession order will be made in his favour.

If he does not qualify, this particular aspect of Hine’s will becomes invalid. However, as administrator of Hine’s estate, Tom still has to ensure the shares are dealt with. Because they are not covered by a provision in the will, the shares will be dealt with as though there was no will. They will go to Hine’s nearest blood relatives who do qualify – namely her children. As Hine’s spouse, Tom will be entitled to a life interest in the income from the shares; and he will need to inform the Māori Land Court whether he wants to accept that life interest.

If the relevant beneficiaries agree, or if Hine has specified this in her will, the shares can be transferred instead to a ‘whanau trust’ or ‘putea trust’ under Te Ture Whenua Māori Act 1993.

This is still done by a succession order.

Tom and the beneficiaries can find more information about this on the Māori Land Court website, and in booklets available from the Māori Land Court.

As executor, Tom applies for a succession order. The application form is available online from the Māori Land Court website. The application fee is $60. Tom should only do this when all estate debts have been paid and there are no outstanding claims. He has to confirm this to the Māori Land Court.

Overseas assets If Hine has property or investments overseas, Tom will need to find out the legal requirements in the relevant country.

The exact process will depend on the financial threshold that applies in that country or state. New Zealand’s similar threshold is $15,000. The thresholds in different states in the United States range from USD10,000 to USD200,000.

There is great variation also elsewhere.

Tom may need to apply for probate in that country, or (if it is a Commonwealth country) he may need to reseal the New Zealand grant of probate that he already holds.

The overseas financial institution should be able to tell him what it requires.

6

Te Ture Whenua Maori Act 1993 – definition of ‘preferred classes of alienees’ (shown above) is in section 4.

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If land is involved, a lawyer in that country should be able to help.

The internet makes it easier for Tom to liaise direct with the overseas financial institution, and to find and instruct a lawyer overseas, and perhaps to research the basics of the relevant law to check what he is being told.

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Claims against estates The main types of claim against an estate are summarised briefly below.

If any of these arise, Tom should seek careful and expert legal advice.

Different types of claim have different ‘limitation periods’ – time limits for bringing any such claim. Sometimes the limitation period can be extended by the court.

If the claim has merit, he should settle it sooner rather than later, to minimise the loss to beneficiaries from legal costs.

‘The will was not made by the truly voluntary act of the will-maker.’

This covers forgery, duress, coercion, undue influence, trickery, mental confusion, mental incapacity, ‘testamentary incapacity’, etc.

Although usually raised before probate is granted, this claim may be raised up to 6 years after a grant of ‘probate in common form’.

A diagnosis of dementia is not enough in itself to support a claim of testamentary incapacity.

‘I am a close family member who was entitled to more.’

This claim – under the Family Protection Act - is available only to the willmaker’s spouse/partner, children, dependent stepchildren, grandchildren, and (in some cases) parents.

The court will consider the will-maker’s ‘moral duty’ – by assessing their reasons, everyone’s comparable finances, everyone’s comparable relationship with the will-maker, and other relevant factors.

Unequal treatment, or complete omission, is not enough in itself to support a claim. (A will-maker has no absolute obligation to leave anything to their children at all.)

An executor who has no knowledge that any such claim is proposed may distribute the estate 6 months after probate is granted. A claim may still be made, but the executor is not personally liable for anything that may be awarded. The beneficiaries will have to pay the claim if it is upheld.

If notice of an intended claim is given before the estate is distributed:  

the executor may be personally liable if a successful claim is subsequently brought and there are inadequate resources in the estate to meet the claim. the intended claimant must start court proceedings within 3 months after that notice: otherwise the notice lapses.

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In a family-protection claim, the executor as such is not usually an active participant. The executor as such has a duty to provide information to the court but does not actively defend the claim. Usually the executor instructs a lawyer who informs the court that the executor ‘abides the decision of the court.’

This does not prevent an executor from actively defending (or supporting) the claim in their other role as a beneficiary under the will.

‘I was promised more because of the services I provided to the will-maker.’

This claim – under the Law Reform (Testamentary Promises) Act – is available to someone who was not given adequate reward in the will, after being promised that the will would include a reward for services provided to the will-maker.

The provision in the will does not have to match the amount promised. It only has to be adequate reward for the services.

An executor who has been notified of a possible claim may issue a formal notice requiring court proceedings to be brought within 3 months. If proceedings are not commenced within that time, the executor may ask the High Court to bar the claim.

An executor who has no knowledge that any such claim is proposed may distribute the estate 6 months after probate is granted. A claim may still be made, but the executor is not personally liable for anything that may be awarded. The beneficiaries will have to pay the claim if it is upheld.

In this type of claim, the executor is usually expected actively to represent the interests of the estate in defence of the claim. This may not apply if all the beneficiaries are separately represented.

‘The will-maker changed their will after promising mum/dad that they would not.’

This covers the situation, usually from a second marriage/relationship, where two partners made ‘mirror wills’ which left everything to each other and then to all the children of both partners, and promised that the survivor would not change this.

If the surviving partner then changes their will to exclude the children of the other partner, those excluded children can claim.

An executor who has no knowledge that any such claim is proposed may distribute the estate 6 months after probate is granted. A claim may still be made, but the executor is not personally liable for anything that may be awarded. The beneficiaries will have to pay the claim if it is upheld.

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‘The will-maker wronged me or failed to pay me.’

This is for a claim that would still have arisen if the will-maker had not died. There may already be court proceedings, or they may have been threatened, or things may not yet have reached that stage.

Tom now has the job of sorting it out.

Tom should obtain legal advice about any claim.

A few types of claim – including defamation - cannot be brought if the defendant is deceased.

Any claim needs to be resolved before the estate is distributed.

For known claims, Tom can issue a notice requiring the potential claimant to bring court proceedings (or to progress existing court proceedings) within 3 months.

If the claimant does not comply, Tom can then ask the High Court to bar the claim, or to make other directions to help the estate administration proceed in the meantime.

For protection against unknown debts or claims, Tom can give notice by newspaper advertisements in appropriate localities, requiring creditors to claim within the time fixed in the notice – which must be at least 1 months, or 2 months if outside New Zealand. When that time expires, Tom may then make a distribution to beneficiaries without being liable to a subsequent claimant. (A subsequent claimant may still ‘follow the property’ and claim it from the beneficiaries, but Tom is not personally liable as executor.)

Both processes have specific requirements in legislation. The High Court can also issue directions, if Tom is in doubt as to the proper course of action.

Tom should obtain legal advice before using either of these processes.

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Changing the will There are two main ways to change what the will says.

Firstly, a beneficiary can refuse to accept a gift under the will.

Secondly, the beneficiaries can agree to change what happens under the will.

Disclaimer – refusal of a gift It is not compulsory to accept a gift under a will.

The intended recipient may refuse to accept the gift.

Usually this is done by signing a deed of disclaimer – a short, legal document that is independently witnessed, and that acknowledges the opportunity to obtain legal advice.

Kiwilaw has an online deed of disclaimer available for $98.00.

For items with no significant financial value, a simple letter or even email should suffice. (‘Thank you, Uncle Tom, for letting me know that Aunt Hine has left me her collection of 8 hand-painted plastic lamp shades. I do not want them. I decline to accept this gift. Please treat it as part of the general residue of the estate.’)

Deed of family arrangement – agreement to change what happens Sometimes the will does not work.

Maybe there is a dispute.

Maybe the property changed after the will was made, and everyone agrees to fix the problem. (For instance, where the ‘Auckland house’ was sold and replaced by the ‘Taupo house’,7 everyone agrees that the Taupo house should go to the daughter who was supposed to get the Auckland house.)

Maybe someone was left out of the will and – before or after they make a formal claim, or even if no formal claim is possible in law – everyone agrees that they should be included.

Usually this is done by a formal deed of family arrangement – a written agreement prepared by a lawyer. Everyone signs it (with an independent witness), after having the opportunity to obtain their own legal advice.

The will is then interpreted according to whatever changes are made by that agreement.

7

See page 10 above.

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Missing beneficiary Sometimes an executor cannot locate one of the beneficiaries.

For example, perhaps Tom has lost contact with Maria’s older son (Tane), Maria being Hine’s daughter who predeceased her.8 As one of Maria’s two children, Tane is entitled to half of Maria’s share of Hine’s estate.

The last anybody knew, Tane went to Bolivia four years ago.

Tom is expected to make reasonable efforts to try to

contact Tane.

If that fails, and if Hine’s estate is ready to be distributed, Tom can advertise appropriately – specifying a response time (at least 2 months from the date of advertisement). He can then seek the High Court’s permission to deal with Tane’s share as though Tane were dead.

Tom should get specific legal advice about exactly what is required, as this will vary from case to case.

The High Court can provide directions about appropriate advertisements and any further steps to be taken.

8

See pages 8 and 17 above.

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Missing creditor Occasionally an executor will be holding funds that the deceased was holding for someone else or owed to someone else, AND where the executor cannot locate that person.

The executor can pay those funds to the Inland Revenue Department under the Unclaimed Money Act. Inland Revenue will pay them to the correct recipient if that recipient claims them in the future.

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Disputes and disagreements Grief Disputes in estate administration almost always involve families and relationships. They are not primarily arms-length commercial disputes. They are made worse by grief and loss.

Grief is powerful and unpredictable. It hits widows, widowers, parents, children, grandchildren, friends, those left something in the will, those left less or nothing in the will, significant others, siblings, partners, extended family, employers, employees, teachers, neighbours, carers,… the list continues.

We saw this illustration on Facebook while preparing this booklet. (We are trying to find who can grant permission to use it. In the meantime we are using it anyway.)

We have added some extra images on the bookshelf – the coloured volumes – they are duplicate copies of ‘GRIEF’ but hidden behind blank (fake) dustcovers. ‘Grief’ is trying to peek out around the edge.

You can write your own labels for those fake dustcovers – maybe ‘CONFUSION’ or ‘ANGER’ or ‘STUBBORNNESS’ or ‘IMPATIENCE’ or ‘HOUSEWORK’ or ‘SUSPICION’ whatever else you or your family are using to cover their grief. (You know yourself and your family best.)

Proceed with caution Expect judgment to be distorted. Yours (as the executor, or as one executor), and others’ (who scrutinise what you do or don’t do).

Be humble. You do not know everything. Be willing to learn. Be willing to listen. Be willing to explain.

In most disputes that start to escalate, the ‘issue’ is not the (real) issue.

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Assumptions and misinterpretations – sometimes decades old - are piled upon miscommunication.

Lines are drawn.

Lawyers are consulted – or not consulted – and sometimes they make things better, sometimes worse.

Try to use a lawyer who is skilled in dispute resolution and peace making.

Suggested approach to resolving disputes This is a suggested approach to the disputes and disagreements that may arise during estate administration. It is not ‘gospel’. It is not ‘case law’. It is, however, based on experience and training in dispute resolution, nonviolent communication, mediation, collaboration, and peace-making, as well as ‘lawyering’.

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Often the law grants beneficiary.

powers

to executors that enable them to override the wishes of a

It also creates duties that executors have to follow, to protect the interests of beneficiaries.

Getting legal advice (and following it) may protect the executor from liability.

Going further -

explaining carefully to the beneficiary and listening to their

needs - may avoid unnecessary legal action and years of family heartache.

If the issue cannot readily be resolved, even with outside assistance, an application

High Court for directions is likely to be the safest course of action.

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to the

How to train your lawyer

Most New Zealand lawyers are used to providing ‘full representation’.

Full representation is ‘how it has always been done’.

Lawyers are often unfamiliar with the alternative approach: using a lawyer for some aspects and acting for yourself in other aspects of the same matter.

This alternative approach is called ‘unbundled legal services’ or ‘limited retainer’ or ‘limited-scope retainer’. It is recognised by the NZ Law Society as a valid way of providing legal services.

It can include ghost-writing documents that are presented in the name of the client instead of by the lawyer – as, indeed, is Kiwilaw’s preferred methodology with probate applications.

It can also include providing legal advice on a specific issue (such as the interpretation of the will), or sorting out some specific issue, or holding the estate funds pending distribution, or preparing the accounts and tax return.

Make it clear beforehand, what type of service you are wanting. If the lawyer is not comfortable with that, use a different lawyer (or go to the Public Trust’s ‘Executor Assist’ service).

Whether you instruct a lawyer to do all the estate administration, or you opt to do some of it yourself, you need to be aware of the implications.

31 | P a g e

Full representation Having looked through this guide, you may have decided to hand everything over to the lawyer and let them take care of it.

That is the traditional approach.

It is entirely valid.

It will cost more in legal fees, than unbundled services.

It will take less of your time.

If anything goes wrong, you have the protection of the regulatory regime administered by the law society, and the lawyer’s professional indemnity insurance.

As executor, you are still responsible for ensuring that you understand – at least in broad terms – what has been done, and why, and that the fees charged are reasonable.

You will have to sign paperwork from time to time and discuss issues that may arise, and check that progress is being made; but you will not have to work out what needs to be done or how to do it.

This guide should help you to understand what is being done and, hopefully, save some of the lawyer’s time in explaining everything.

‘EXECUTORS FREQUENTLY REQUEST A LAWYER TO APPLY FOR PROBATE, BUT THEN CARRY OUT THE REST OF THE LEGAL WORK THEMSELVES.’ NZLS Practice Briefing: Guidance to Lawyers Considering Acting under a Limited Retainer’

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Unbundled services You may prefer to delegate only some of the work to a lawyer.

You will need to explain this to the lawyer and ensure you are both clear about who is doing what.

You still have the protection of the regulatory regime and the lawyer’s professional indemnity insurance, but only for the specific services that you instruct the lawyer to provide.

Ensure that whatever is decided is in writing – the lawyer should document exactly what they will be doing, and you need to ensure that you do the rest.

Here are some examples: 

Who is going to check what funds are held and by whom? You, or the lawyer?



Once it’s clear who holds what, if money has to be uplifted from three different institutions and paid into the lawyer’s trust account, are you going to contact those institutions and fill in their forms and provide a certified copy of probate and have them pay the money to the lawyer’s trust account? Or is the lawyer going to do that? Or will you ask the lawyer to provide some certified copies of probate so that you can do the rest?



Who is contacting Inland Revenue?



Who is preparing the list of assets? Are you preparing a draft, or are you asking the lawyer to do it?



Who is preparing the list of debts that need to be paid?



Are all the debts being paid individually from the lawyer’s trust account? – with time being billed for every payment that is made? Or are you paying them from your own resources and then providing full details so the lawyer can reimburse you with one payment from the estate funds? Or are you doing all the financial work yourself, and running a separate bank account for the estate, and just asking the lawyer to (a) confirm that you have understood the will correctly, and (b) later on to check that everything has been covered and it’s safe to pay the beneficiaries? And perhaps for specific legal advice if an issue arises along the way? That too is possible in law. (You can expect financial institutions and lawyers to be surprised by this approach.)

Avoid future misunderstandings about who is doing what. Put it in writing, if the lawyer doesn’t.

(And send a copy to the lawyer.) Check what the lawyer sends you, if they put it in writing (as they should).

Remember that the lawyer can legitimately charge you for the time it takes to work out and record who is doing what. Don’t make it too complicated.

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Lawyers’ obligations – brief summary

Whatever legal services your lawyer is providing, he/she must:

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

Act competently, in a timely way, and in accordance with instructions received and arrangements made.



Protect and promote your interests and act for you free from compromising influences or loyalties.



Discuss with you your objectives and how they should best be achieved.



Provide you with information about the work to be done, who will do it and the way the services will be provided.



Charge you a fee that is fair and reasonable and let you know how and when you will be billed.



Give you clear information and advice.



Protect your privacy and ensure appropriate confidentiality.



Treat you fairly, respectfully and without discrimination.



Keep you informed about the work being done and advise you when it is completed.



Let you know how to make a complaint, and deal with any complaint promptly and fairly.

Resources Legal advisers Lawyer who prepared the will – just because you found a cheaper way to obtain probate, that should not deter you from using their expert services in other aspects of estate administration Lawyers who practise in the area of estates – search the NZLS ‘Find a Lawyer’ database and include ‘estates’ in your search terms. 

https://www.lawsociety.org.nz/for-the-community/find-lawyer-and-organisation

Lawyers who practise in the area of dispute resolution / mediation – do a similar search.

Non-lawyers may legitimately provide professional legal advice about estates (in New Zealand there is no legal requirement to hold a current practising certificate in order to provide professional legal advice).

Public Trust – Executor Assist service Perpetual Guardian – similar service to Public Trust

Dispute resolution Arbitrators’ and Mediators’ Institute of New Zealand Inc – find a mediator 

aminz.org.nz – 0800 4 AMINZ – institute@aminz.org.nz

Fairway Resolution Ltd – mediation - commercial and private disputes 

fairwayresolution.com – 0800 77 44 08 – civildr@fairwayresolution.com

Free online information Grief and resilience – optionb.org Grief and resilience – skylight.org.nz NZLS Practice Briefing: guidance to lawyers considering acting under a limited retainer (undated): https://www.lawsociety.org.nz/practice-resources/practice-briefings/Guidance-to-lawyers-actingunder-a-limited-retainer.pdf

Recommended reading Grief and resilience Sheryl Sandberg and Adam Grant, Option B: facing adversity, building resilience, and finding joy (2017)

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Communication, negotiation Margaret E Anderson, Bridges to Consensus in Congregations: get what you need from one another while building bridges, not burning them (2011) 

although targeted at church congregations, this plain-language guide is helpful for families and other informal organisations

R Fisher and W Ury, Getting to Yes: negotiating an agreement without giving in (3rd edition, 2012) Marshall B Rosenberg, Nonviolent Communication: a language of life (3rd edn, 2015)

Legal texts Buy them, use them, then check your understanding with an expert if necessary – resell them afterwards on Fishpond.co.nz. 

Lindsay Breach, Nevill’s Law of Trusts, Wills and Administration, 13th edition (Lexis-Nexis NZ Ltd, Wellington, 2019)



W M Patterson, Law of Family Protection and Testamentary Promises, 5th edition (Lexis-Nexis NZ Ltd, Wellington, 2021)

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https://kiwilaw.co.nz/probate