What is an estate?
The deceased's property is called 'the estate'. It includes assets - namely personal possessions, funds in bank accounts, property, insurance policies, etc. It also includes liabilities such as funeral expenses, taxes, debts and other liabilities incurred by the deceased.
What are the steps involved in administering an estate?
In order to administer an estate a number of steps need to be taken and may include:
- Determining the Will is the latest version and locating any codicils;
- Obtaining probate;
- Identifying assets and beneficiaries;
- Identifying all possible claimants;
- Valuing assets;
- Paying taxes;
- Paying debts; and,
- Distributing the estate to the beneficiaries.
When can an estate be wound up and distributed?
This is usually completed six months from when probate was granted. However, some complex estates can take more than twelve months to be wound up.
Why does it take so long?
The law needs to provide a sufficient time frame from the date of death for any person who may have rights to bring a claim against the estate, and also for any creditors to make themselves known. In some circumstances, this includes locating the beneficiaries which can be a time consuming process.
Does the estate have creditors?
The executor is responsible for advertising for creditors in the local newspaper where the deceased resided at the time of their death, anywhere they lived for the previous two years. Creditors only have 30 days to submit any claims. However, claimants against the estate have six months in which they can submit a claim to contest the Will.
Who should I contact to ensure debts of the estate are paid?
It is a good idea to contact:
- The deceased's bank(s);
- Their landlord;
- Their employer;
- Work and Income New Zealand (if they are retired or receiving a benefit);
- Their power supplier and telecommunications provider; and
- Any hire purchase creditors.
The executor should also redirect all mail to their own address, keep an inventory of the deceased’s belongings and an account of any money paid on behalf of the estate.
What happens to jointly owned assets?
The jointly owned assets pass automatically to the surviving owner. Relevant authorities need to be instructed regarding a transfer from joint name to the sole survivor. Joint assets do not form part of the estate.
What are the main Acts of Parliament associated with Estate Administration?
Family Protection Act 1955
This Act allows certain family members to make a claim against an estate if they feel they have been inadequately provided for (or not provided for at all) under the terms of the Will. Additionally, a family member may make a claim under this Act, but only if they were providing some form of financial assistance to the deceased during their lifetime.
Administration Act 1969
This Act provides for the administration of estates. It also has provisions as to a person dying intestate (without a Will). In such case the law sets out priorities as to the order and proportion of the deceased's property that should go to certain people. These people are generally family members and the allocation to each person depends on which family members exist and are still living.
Wills Act 2007
This Act sets out the law with regard to Wills, and gives the Court discretion to uphold and validate Wills that may not necessarily meet strict legal requirements. The Court may also permit corrections to the Will in order to better carry out the intentions of the Will maker.
Property (Relationships) Act 1976
This Act not only applies to married couples, but also people living in de facto relationships, those in a civil union and same sex couples. The Act provides for 50/50 sharing of relationship property on death. All property of the deceased is deemed to be relationship property, unless it is proven otherwise.
Law Reform (Testamentary Promises) Act 1949
This Act provides a remedy for people who have performed work or services either unpaid or poorly paid and those who have been verbally promised some provision in the Will.
Do funeral expenses get paid first?
Yes, funeral expenses get preference above any other estate debt and must be paid first.