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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‘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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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.
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