September is Wills Month.

In the Community
Trusts, Asset Protection & Estate Planning
Aug 20 2024
A Will is perhaps the most important piece of paper you can leave behind to support your loved ones. Why do you need a Will, what happens if you pass without a Will, and how best should you prepare your Will for your circumstances?
Download our Wills Month Information Pack.
September is Wills Month. Holland Beckett offer a free “Simple Will” if you leave a gift to charity in your Will.
Speak to the Holland Beckett Succession and Estates team about Wills Month and what charity giving options would best suit you.
Contact the team on estates@hobec.co.nz or call our offices on 07 578 2199.
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Gift vs Loan – What’s the difference and Why it matters in Estate Planning
It is common for parents to help children financially - whether it is a deposit for a first home, help with debt, or business support. However, when that money changes hands, it is important to be clear: was it a gift or a loan? This simple distinction can have significant legal and financial consequences, especially when it comes to estate planning.
What is a Gift?
A gift is a transfer of money or property made with no expectation of repayment. In legal terms, once given, the money no longer belongs to the giver.
Key features of a gift:
It is unconditional.
There is no written or implied agreement for repayment.
The recipient is free to use it however they like.
It can affect future Family Protection or Relationship Property claims.
It can affect the ability to qualify for residential care subsidy or other Government support.
Family Relationships
Care needs to be taken where you are gifting money to your child and their partner, such as to help them into a property. Should that relationship break down, the partner would not necessarily be required to pay back any portion of the gift, therefore walking away with half of the gifted money.
Dealing with banks
If you are taking out a mortgage or loan with a bank, gifting certificates are often required where a family member is advancing a portion of the purchase price. This is so the bank isn’t in competition with anyone to get their money back should the bank loan end up in default. There are ways to record this on terms acceptable to the bank, while also protecting the advance. The document needs to be worded in such a way that doesn’t impede on the banks rights to be “first in line”.
Estate implications
If you have made significant gifts during your lifetime, this can reduce the assets available in your estate. If you give more to one child than another, it could cause disputes or be challenged under the Family Protection Act 1955 by children who believe they have not been adequately provided for.
What is a Loan?
A loan, by contrast, is money given with the expectation it will be paid back, either on demand or on agreed terms.
Key features of a loan:
It may be interest-free or interest-bearing.
There is usually some record of it (e.g. a loan agreement or promissory note).
It may be repayable on death or earlier.
It can be secured (e.g. against property) or unsecured.
Better protection
A loan provides protection in the scenario where you are advancing money to your child and their partner. If this relationship later breaks down, you can “call up” the loan and have this paid back. You can then re-lend the money to your child once the separation is complete for another purchase, if you choose to. However, as noted above, when banks are involved they will usually not allow a loan with interest or a specified repayment date, as this can affect the banks priority if the loan is defaulted.
Estate implications
A properly documented loan becomes an asset of your estate. Your executors can call the loan in after your death. This is especially useful if you want the amount to be eventually divided fairly among all children but are happy for one child to have the benefit of it in the meantime.
Beware of time limits under the Limitation Act 2010
If a loan is not properly documented, or if there is no clear date or mechanism for repayment (such as being repayable “on demand”), you run the risk that the loan becomes unenforceable over time. Under the Limitation Act, the right to enforce a debt usually expires six years after the cause of action arises. If the loan is repayable on demand, that six-year period may begin as soon as the money is transferred - unless otherwise specified. To protect your estate, it is important that any loan agreement includes clear repayment terms and triggers for demand, to ensure it remains recoverable.
Why the Difference Matters
Failing to document whether financial support was a gift or a loan can lead to:
Disputes between siblings over whether the recipient should get more than others.
Relationship Property claims, especially if a child separates and their partner claims half of what was received.
Unintended tax or trust consequences, if the money was meant to be protected.
Expired claims, if the estate cannot legally recover the loan due to limitation periods.
How to Protect Your Intentions
Document it clearly: Use a deed of gift or a formal loan agreement. This helps your family and your executors understand your intentions.
Include repayment terms: Clearly outline when the loan is due, how it can be demanded, and what triggers repayment - this avoids limitation issues.
Consider your Will: Your gifting or lending decisions can affect what is in your estate - make sure your Will aligns.
Talk to a lawyer: A small amount of advice now can save thousands in legal fees (and family stress) later.
Whether you are helping your children financially now or planning for what happens after you are gone, be clear about your intentions. A well-planned estate not only protects your assets but also your family relationships. If you are unsure whether past financial help was a gift or a loan - or you want to formalise it - talk to the Holland Beckett Succession and Estates team.
This article was first published for First Mortgage Trust, July 2025 newsletter.

Can I Disinherit My Children?
Many people assume that writing a Will gives them absolute control over who receives their property when they die. While that’s largely true in principle, New Zealand law imposes limits on testamentary freedom - particularly when it comes to children and other close family members.
If you are thinking about leaving a child out of your Will, it is important to understand what the law allows, what risks you may be taking and how you can best structure your estate planning to achieve what you want.
What does it mean to disinherit a child?
Disinheriting a child means deliberately choosing to exclude them from your Will - leaving them nothing, or only a token gift, in favour of other beneficiaries such as a spouse, a charity, or another child. This might be because of estrangement, past conflicts, financial independence, or other personal reasons.
Can I disinherit my children?
Yes, you are allowed to make a Will that leaves your assets to whoever you choose. However, that decision can be challenged after your death if the law finds that you failed to meet your obligations to your children.
In New Zealand, the key legislation that allows Wills to be challenged is the Family Protection Act 1955 (FPA).
What is the Family Protection Act 1955?
The FPA gives certain family members - including children of any age - the right to challenge a Will if they believe the deceased failed to make adequate provision for their proper maintenance and support.
This does not mean children are automatically entitled to a share of your estate. However, it does mean that if you exclude them, a Court will consider whether that exclusion was appropriate, given the circumstances.
Who can claim under the FPA?
Spouses and civil union partners
De facto partners
Children (including adult children)
Grandchildren (if their parent is deceased)
Stepchildren (in some cases)
Parents (only if the deceased left no spouse or children)
What will the Court consider?
When deciding whether a parent has breached their moral duty to a child, the Court looks at a range of factors:
The size of the estate
The child’s financial needs and circumstances
The relationship between the parent and the child
Any contributions the child made to the estate
The needs and claims of other beneficiaries
Whether the child was supported or gifted during the parent’s lifetime
Importantly, being estranged or financially independent does not automatically disqualify a child from succeeding in a claim.
If the Court can just step in, then does disinheritance ever succeed?
Yes - there are cases where disinheritance has been upheld by the Courts, particularly where:
The child is financially well-off, and the estate is modest
The relationship was seriously broken, and the parent had good reasons for exclusion
The parent has clear documentation explaining the decision
Other beneficiaries (e.g. a surviving partner or dependent child) have stronger moral claims
But there are also many cases where Courts have re-allocated estates, awarding disinherited children a portion of the assets because the parent’s Will failed to meet their legal duties.
What about Trusts or gifting assets before death?
Some people try to avoid FPA claims by transferring assets into Trusts or giving them away before death. These strategies can work - but they come with risks:
If challenged, they may trigger litigation under other laws (e.g. the Property (Relationships) Act 1976 or Law Reform (Testamentary Promises) Act 1949)
Trusts must be carefully structured to avoid sham arrangements
It is essential to get advice before taking these steps, as poorly executed strategies can lead to costly and protracted disputes.
Get advice
If you are considering disinheriting a child, you are best to get advice from a lawyer specialist in this area. Best practice in this situation would include the following steps:
Clearly record your reasons in a written memorandum to be stored with your Will
Consider leaving a modest legacy to the child to reduce the likelihood of a claim
Avoid emotional or vague explanations - focus on objective factors
Ensure your Will is up-to-date and properly witnessed

Succession planning for your digital assets
As we have moved into a more digital age, consideration should be made as to what happens to your digital assets when you die.
Increasingly, people are amassing both personal and business digital assets that have value – let’s not forget about James Howells who has spent a considerable fortune trying to dig through a Newport landfill site to find his private access key for his Bitcoin, which is now worth a whopping $800m.
So, what are your digital assets, what happens to them when you die, and how can you make sure they are not lost?
Your digital assets, which may have more value than others, include:
Digital assets on computing devices;
Financial accounts, including online gaming accounts, Bitcoin or other cryptocurrency wallets, and FOREX trading accounts;
Digital books, music or video streaming;
Cloud storage accounts;
Payment services;
Social media accounts used for marketing or advertising, loyalty programmes and any other;
Computer programmes directly installed onto a computer or provide the software as a service;
Intellectual property;
The infrastructure of an online business – websites and blogs;
Customer management services that manage mailing or newsletter descriptions.
You may also have assets of sentimental or other value such as photos, family trees (ancestry.com), or emails.
The best thing you can do is consider what you wish to happen to these digital assets and make provisions in your Will as to who has the right to access your digital assets, either stored on your computer, phone or that exist online, to amend or remove any profiles and provide any other notifications as required. Provision should also be made in your Will as to where all of the details of relevant passwords and logins are contained. It is therefore important to have a “password safe or manager” that stores and encrypts a list of passwords and user names for all online assets with the master password either provided in a sealed envelope with your Will or some other way with your Executors.
In addition, many online providers have their own policies as to what happens when you die and the rights to those digital assets will vary from provider to provider – for example, Facebook allows people to turn a deceased profile into a memorial page and Google allows you to plan ahead and appoint inactive account managers who are notified if the account is inactive for a certain period of time or you can choose to have the account deleted entirely.
Speak to your legal advisor about a specific clause in your Will relating to digital assets and what you would like to achieve. This clause should cover whom you wish to leave your digital assets to, what that includes and any appropriate login data.