Last minute Wills

If you have been appointed as an executor of a Will, then when that person dies you are responsible for administering their estate and carrying out their wishes according to the Will. An executor’s role can be very straightforward, or it can be fraught with conflict.  Read on to find out how to deal with all potential eventualities. Some key responsibilities include: Find and locate the Will; Understand the asset pool of the Willmaker eg. where they bank, do they own any vehicles or property; Do you know the immediate family of the Willmaker and those who should be notified; Make any relevant and important decisions in respect of the estate; Manage all decisions and disagreements around the estate. Locating the Will and understanding the terms You should locate the original Will and ensure you understand its terms, for example, what happens if a beneficiary has passed away or if the beneficiaries are still minors.  The estate’s lawyer can assist with any interpretation issues. It is very important that you keep the Will in a safe place and do not alter or mark it in any way. Identifying assets and liabilities of the estate You must identify the assets and liabilities of the estate such as bank accounts, property, insurance, shares, income streams and debt. If the estate has an asset worth more than $15,000, then you must engage an estate lawyer and apply for probate.  Probate gives you, as executor, authority to deal with the assets of the estate. Applying for probate The Court ensures that an estate is not left unadministered where an executor refuses or neglects to carry out their duties.  If you fail to apply for probate within three months from the death of the Willmaker, any other executor, or any other person interested in the estate, can make an application to Court to be appointed as your replacement.  The Court will give you the opportunity to respond, or to formally step down.  If the Court does not hear from you, then an alternative executor will be appointed by Court order. The Court has the power to remove you and appoint a replacement.  For example, there may be conflict issues between you and another executor, or a family member, or other interested person might take issue with your appointment.  This will involve a Court hearing if you wish to defend your position, or you do not reach an agreement to step down.  Often the appointment of an independent person can resolve conflict issues. Securing and insuring property Any assets should be secured so far as possible.  For example, if there is a property, you should check who has access to keys, that the insurance is up to date and that any expenses (such as rates, water and power) are up to date. Notifying relevant parties You or the estate’s lawyer should notify relevant providers of the passing, such as the estate’s bank, insurer, WINZ (if a benefit was being received), IRD and any other asset providers or debtors. You must also notify the beneficiaries of the Will and make relevant disclosures to them.  Your estate’s lawyer can assist with this. Risks facing executors Potential arguments can arise between family members who may be unhappy with the terms of the Will.  The Court can become involved where an interested party makes a claim on the estate. As executor, you are named as a party to the claim and are required to participate in the Court process.  You are under a duty to take into account the interests of potential claimants on an estate and therefore can be held personally liable to the beneficiaries or potential claimants for distributions made within six months from the grant of probate.  Due to this potential liability, it is strongly advised that the estate’s assets are generally not distributed until the expiry of six months.  In practise, estates can take several years to distribute. Before making distributions, you should seek advice from your estate’s lawyer to ensure you are not exposing yourself to undue risk.  You also should take advice as to how to manage any conflict between the beneficiaries and how to deal with potential claims.  The Court of Appeal has confirmed that an executor must be even-handed when dealing with beneficiaries/claimants and must not actively or dishonestly conceal relevant information about the estate. As executor, you are required to act with neutrality and independence, while doing your best to follow the wishes of the Willmaker.  You can attempt to reach agreement with all beneficiaries as to how assets are to be distributed, but if there is no agreement it will be for a Court to decide. Although uncommon, you may also be required to act on the interests of minor children or mentally disabled persons who are otherwise entitled to make a claim. When all estate administration steps are complete and the executor is holding the assets ready to distribute, they become a trustee similar to a trustee of a family trust with duties and obligations under the Trusts Act 2019. Often this period of trusteeship is short, as the Will stipulates distribution out to beneficiaries. The trustee’s role can continue depending on the wording of the Will. Executor expenses In New Zealand, the general rule is that an executor cannot charge for their time unless there is a specific clause in the Will allowing them to do so.  However, executors are entitled to reimbursement for their reasonably incurred expenses.  This could include if you were to pay the insurance for an estate property or a rates bill to avoid a late fee. Executor’s decision making Executors are appointed by the Willmaker to carry out their intentions.  It is important to always consider the intention and wording of the Will before making any decisions.  Those close to the deceased will want to be involved in any decisions and this should be welcomed.  The executor will work as a neutral person making sure that the wishes of the deceased are upheld eg. if they want to be cremated making sure that this is done, or the specific bequests are carried out. Where there are intimate decisions that need to be made eg. where to bury the body and the Will will not necessarily specify this – it is the role of the executor to facilitate discussions and agreement between the whānau. Can I get out of it? If you are unable or unwilling to be an executor, the next nominated person in the Will can be appointed.  You will need to renounce before you take any steps to administer the estate. If you have accepted the role as executor and the estate administration is ongoing, you cannot simply retire, but rather you have to apply to the Court to be removed (and replaced if required). The role as executor will continue for a long period of time, for example where the estate holds a property and a beneficiary has a life interest to live in it, or there are minor children not due to receive their inheritance until a certain age.  If this is the case and you no longer want to be an executor, then provided the estate administration steps have been completed (gathering of assets, paying debts), then it is possible for an executor, who is now technically a trustee of the estate, to retire and another to be appointed by Deed rather than involving the Court.  Frequently we see executors retire in this situation and an independent trustee or trustee company is appointed to continue the ongoing management of the estate and manage the obligations to beneficiaries. What is a Statement to Accompany a Will or a Memorandum of Wishes and should I read it A Statement to Accompany a Will is a statement made by the Willmaker explaining any decisions made in the Will.  It provides more of an understanding around what the intention of the Willmaker was at the time of drafting and signing the Will. The Memorandum of Wishes is similar to the Statement whereby it gives the executor or trustees further instructions with the Will and helps give insight into what decisions they want to be made.  Neither of these documents are legally binding, however, it is useful to read them and consider what they are wanting to achieve. How to get important information The best way an executor can obtain information about the Willmaker’s assets and liabilities would be before death.  If you find yourself aware that you are an executor of an estate, have a conversation with the Willmaker. Where do they keep their bank statements or passcodes if you need to locate them, who is the property insured with?  Make sure that if there are any updates that you are aware of these. It pays to have an updated Will, necessary statements or instructions for the executor and to have regular conversations about what you would like to have happen when you die. Talk to our estate planning team about your options and to obtain the right advice for you.

Making sure you have a Will in place is one of the most valuable actions you can take to support and guide your loved ones after you pass away. In your Will, you can decide who is in charge, and instruct exactly how your assets should be dealt with when you die. When you have a Will, the process to administer your estate is generally cheaper and quicker. Without a Will, your assets are distributed to eligible family members according to the legal framework in the Administration Act 1969 (“Administration Act”), which may not work out how you think. The process is more complicated, takes longer, is generally more expensive and you have no say over who is in charge and who gets what. What is the process if you die without a Will? This is called \"dying intestate\". If you own assets over $15,000, then an application to the Court for Letters of Administration will be required. A person with an interest in an estate (i.e a surviving partner or spouse, or children) can apply to administer an intestate estate. The right to make the application is in order of priority under the Administration Act 1969. Some of the fundamental rules of the Administration Act 1969 are: If you have a husband, wife, civil union or de facto partner, but no living parents or children, the spouse or partner will get all of your estate. If you have a spouse or partner and also children, the spouse or partner will receive all of the personal chattels, the first $155,000 of your estate and 1/3rd of the remaining property. The other 2/3rds will go to your children. If you have a spouse or partner and no children, and living parents, the spouse or partner will receive all the personal chattels, the first $155,000 of your estate and 2/3rds of your remaining property. The remaining 1/3rd will go to the surviving parents. If there are children, but no husband or wife or civil union or de facto partner, your estate will go to your children. Before an application is made, a search has to be conducted to confirm that no valid Will exists and a search to confirm the status of children entitled to inherit. Consents from interested family members who are not applying (e.g. other children entitled to inherit) also need to be obtained. The process could become even longer and more complicated if there are disagreements about who should apply. All of this slows down what could otherwise be a straightforward process. How does this differ if you die with a Will? A Will appoints executors who have the authority to apply to the Court for a Grant of Probate, and then deal with your assets in accordance with the wishes you set out in your Will. Unlike Letters of Administration, there is no need to obtain any searches or consent, and there are no rules around who you have to leave your estate to, although you have a “moral duty” to include children and spouses/partners in some way. An application for Probate is generally cheaper and quicker. Most importantly, it puts you in control of where your estate goes. In your Will you can: Give away specific chattels i.e  jewellery, watches, cars, artwork, heirlooms, pets (yes, these are chattels) Specify gifts such as cash sums, shares Decide who will receive the balance of your estate Indicate burial wishes Nominate a legal guardian for your children if they are minor What happens in an estate administration? Assuming you have over $15,000.00 in your sole name (remembering that joint assets pass to the other co-owner automatically), then the administrator must visit a lawyer who will help them apply for a grant of Probate (if you have a valid Will) or Letters of Administration (if you die intestate). After the Court has approved the application, the administrator must find out what the assets and liabilities of your estate are and, if necessary, have assets valued and sold. Then they must pay any debts and taxes out of the estate funds. The balance is then paid out to the beneficiaries in terms of either the Will or the Administration Act rules. Generally this does not occur until at least 6 months from the date of the grant. This is because the administrator can be personally liable for distributions made within 6 months, in the event there was a claim on your estate (this could be a debt or it could be a claim by a family member). The estate could take much longer to distribute if there are a number of assets to be sold and debts to be worked through. If there is a claim on an estate, distribution could take several years. Contact our Estate Administration team if you would like to discuss this further. This article was first published for First Mortgage Trust, October 2024 newsletter.

We often get enquires for missing Wills. (Of course, these are not Wills that we have drafted - those are safely stored in the Holland Beckett deeds safe.) Locating a missing Will can be very stressful and locating the original requires a systematic search. If you know someone had a Will, the search must commence - without it, obtaining a grant of Probate is much more complex. If you have a copy of the will, you may be able to seek Probate of a lost Will. If the will does not surface, could it be that the person never did a Will? If so, an advertisement (discussed below) must be advertised before a grant of Letters of Administration will be issued by the Court. If a Will cannot be found, the estate may have to be distributed according to New Zealand’s intestacy laws. How to find a missing Will: Check personal records and safe places: Search the deceased’s home and personal papers. Look in safes, safety deposit boxes, and any hidden or secure places where important documents might be stored. Family and friends: Sometimes family members or close friends may have a copy of the Will or know where the Will might be. Contact their lawyer: Reach out to the lawyer who may have drafted the Will. Lawyers often (and in our view should) keep copies of their clients’ Wills. High Court: If the Will has been probated (or perhaps it was made and sealed via Court proceedings - more on this another day), the High Court might have a copy. Contact the High Court in the region where the deceased lived. Law Society advertisement: If you are unsure which lawyer might hold the Will, contact the New Zealand Law Society to place an advertisement in newsletters received by all lawyers. You can contact the Law Society to advertise for a will here: NZLS | Advertise for a will (lawsociety.org.nz) As a matter of good practice, a lawyer will not release details of a Will to anyone - that is confidential to the Will-maker during their lifetime and when they have died, it is up to the executors. The above also illustrates the need to talk to your friends and family about your Will, and where to find it should they need to. This can alleviate a lot of stress during what will be a difficult time. For any Estate and Will queries, get in touch with our specialist team at estates@hobec.co.nz.