Courtney Henderson

Effective 24 September 2025, the threshold for informal administration under the Administration Act 1969 has increased from $15,000 to $40,000. This long-awaited change (which had not been updated since 2009) brings significant relief for families dealing with modest estates. Administration without a Grant from the Court The increase in threshold allows certain financial assets to be released when someone dies without requiring a formal grant of probate or letters of administration. The process is governed by sections 65(2) and 65(5) of the Administration Act 1969 and applies only to specific institutions and asset types. What assets are covered? The new $40,000 threshold applies to financial assets held by: Superannuation fund trustees Societies Banks Employers Local authorities Trustee corporations Kāinga Ora ACC MSD The Crown These institutions may release funds without probate, provided they are satisfied the owner has died and the recipient is one of the eligible persons listed in section 65(2)(a)–(e). Life insurance policies under section 65(5) are also covered by the new threshold. What is not covered? The increase does not apply to: Shares and debentures (threshold remains $15,000) Non-financial assets such as real estate, vehicles, jewellery or artwork Cryptocurrency, as exchanges are not listed institutions under the Act If these assets are involved, a formal grant is still required. Does it apply to deaths before 24 September 2025? Yes. The Act specifies that the new threshold applies regardless of the date of death, as long as no grant has already been issued. Families may choose to wait until after 24 September 2025 to benefit from the new threshold. Checks and balances Institutions retain discretion and may refuse informal administration. Policies vary and may evolve in response to the change. Practitioners should be aware that institutions are protected under section 65(6) for payments made in good faith. Funeral expenses: are they extra? No. While banks may release funds directly to funeral directors, this is not added to the $40,000 threshold. The prescribed amount is assessed as at the date of death. What does this mean for you? If you are managing a loved one’s estate, or advising on estate planning, the higher threshold may offer a simpler and faster pathway where assets are modest. It may also reduce legal costs in some cases, while also reducing the administrative burden on the High Court. However, it remains essential to have a valid Will and proper estate planning in place – especially as more estates are growing in value or involve trusts, cross-border assets or complex family structures. If you are unsure whether a grant of administration is needed, our succession and estates team is here to help.  

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 take part by offering a free Simple Will, or a 20% discount on a Complex Will, if you leave a gift to charity in your Will this September. 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.

In today’s evolving financial and legal landscape, having a valid Will in place has never been more critical for New Zealanders. The absence of a Will can lead to unnecessary delays, stress, and cost for families. One of the most overlooked reasons to have a Will is KiwiSaver. Many people assume their KiwiSaver balance will automatically pass to their partner or next of kin on death, but that’s not how it works. KiwiSaver funds are held solely in the name of the individual and do not pass by survivorship (think, property held as joint tenants). Instead, they must be dealt with as part of the person’s estate, and if there is no Will, this creates delays and uncertainty in accessing those funds. With the recent Government budget injecting more incentives and support into KiwiSaver, balances are likely to grow significantly over time. Another relevant factor is the probate threshold. Currently, assets over $15,000 will require a grant from the Court. This threshold is due to increase to $40,000 in the September 2025 to better reflect current asset values. In real terms, the threshold is easily exceeded - especially when you consider KiwiSaver. Without a Will, for which the Court can grant “probate”, family members must apply for “letters of administration” which can be slower and more complex, particularly when family dynamics are tense. At the same time, more New Zealanders are choosing to own property as tenants in common rather than joint tenants - especially in blended families or where people wish to protect their children’s inheritance from a new partner. This structure allows each party to leave their share of the property to whomever they choose, provided they have a Will to specify that. In this situation, a Will should complement any Contracting Out Agreement (or “Pre Nup”). Many family trusts are now being wound up or simplified due to changes in trust law, compliance costs, aging/migrating settlors and international beneficiaries (giving rise to tax implications). As assets come out of a trust and revert to personal ownership, they become part of a person’s estate and must be carefully dealt with by their Will. Overseas properties, investments and digital assets can be challenging to deal with if someone passes without a Will (or Wills) to reflect what should happen to assets in other countries. Having a Will is no longer just about passing on the family home - it’s about ensuring some thought is given to the increasing complex assets and arrangements of the modern estate.   With the right guidance, a complicated situation can have a clear and manageable solution. The key is to decide what you want to achieve, and get a Will drafted to reflect that. Holland Beckett’s specialist succession and estates team provide expert advice on succession planning and can help to create a Will that best reflects your individual situation. This article was first published in the New Zealand Herald and Bay of Plenty Times, July 2025.

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.

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

Mirror Wills In a typical, nuclear family structure, it is common for a couple to leave their entire estate to each other, and for their Wills to provide that after they have both died the family estate will go to their children. This is commonly known as a mirror Will. In the modern age, however, blended family structures are becoming increasingly common. If you have children from a previous relationship, you may find yourself stuck between wanting to ensure your children are provided for, and also ensuring your partner is looked after when you die. If a couple is comfortable relying on their new partner to provide for their respective children in the surviving spouse or partner’s Will, a mirror Will could still be used. However, these Wills do not create a legally binding agreement between couples. Either spouse or partner is therefore free to change their Will at any time during their lifetime. These Wills frequently result in claims against the estate made by the deceased spouse or partner’s children from a previous relationship. Mutual Wills A mutual Will is another available option. A mutual Will is a mirror Will signed alongside an agreement between the respective Will-makers that they will not amend the terms of the Will in a way that will worsen the position for their stepchildren. While mutual Wills are effective for protecting the interests of both partners’ children, they are restrictive on the surviving partner and can be difficult to enforce. To help avoid the risk of claims against your estate, and to offer peace of mind, a life interest Will may provide the answer. Life Interest Wills In your Will you can grant to somebody a life interest in an asset, giving that person the right to use that asset for the rest of their life. On their death, the asset will pass to the people named in your Will. Life interests may be granted in: Your entire estate; Specific assets e.g. family heirlooms; Real property e.g. the family home; or A right to receive income from estate property e.g. bank account, shares or other investments. A life interest can be a good way to provide for your partner, while still ensuring the asset will eventually be given to the named beneficiaries, usually your children. A common example is where a person provides a life interest in the family home to a spouse or partner, and once their spouse or partner dies the family home will pass to the Will-maker’s children. Often the couple will own the family home in equal shares. This allows each of them to deal with their 1/2 share in their Will in the way they choose. A life interest Will provides a basic level of asset protection. Any assets subject to a life interest will be held by the trustees appointed in the Will and do not legally belong to the person with the benefit of the life interest (such as the surviving spouse or partner). It can therefore provide peace of mind to the Will-maker that all of their loved ones will be looked after. On the other hand, a life interest can be restrictive for the surviving spouse or partner. The surviving spouse or partner effectively loses control over assets that they may have considered to be theirs if they were used by the couple to benefit both of them. Any dealings with the asset will require the trustees of the Will to consent, and will be subject to the terms of the life interest in the Will. Issues can also arise if the circumstances of the surviving partner change, for example, if they need to go into care or move into a retirement village. A life interest Will can also mean the children may not see their inheritance for many years. Holland Beckett’s succession and estates team is here to discuss your particular circumstances to determine if a life interest Will is right for you.

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 succession and estates 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 succession and estates team if you would like to discuss this further. This article was first published for First Mortgage Trust, October 2024 newsletter.

Ideally, a Will is prepared with a lawyer after careful consideration. Someone facing imminent death or decline may want to urgently prepare a new Will or update their current Will. These Wills are often referred to as deathbed Wills, last minute Wills or bedside Wills. These Wills are valid if executed properly. Technical Requirements For a Will to be valid it must meet the requirements in s11 of the Wills Act 2007 (“the Act”): The Will must be in writing; The Will-maker must sign the Will (or direct another person to sign on their behalf in their presence) in the presence of two independent adult witnesses; The witnesses must then sign the Will confirming they were present when the Will-maker signed the Will. The Will-maker must have also intended to make a Will. It is relatively common for last minute Will-makers to use family members to witness their Will, often because they are immediately available at the time. However, this can invalidate the Will or a gift within the Will if a witness is a beneficiary or the partner of a beneficiary. If a Will does not meet the validity requirements, the Court can declare a Will valid under s14 of the Act. However, this can be an expensive and time consuming process, particularly if there is a dispute amongst beneficiaries. Grounds for Challenge If the Will is technically valid, the mere circumstances in which it is prepared makes the Will more vulnerable to challenge. This includes if the terms of the Will differ considerably from the terms of a previous Will or, where there is no previous Will, from the laws of intestacy. The more significant the changes from a previous Will or conventional norms, then the greater likelihood that consideration must be given to the issue of capacity or undue influence. For example, leaving an estate to an acquaintance or neighbour rather than the Will-maker’s children would be considered a significant change. Challenges on the Basis of Incapacity A Will-maker must have testamentary capacity at the time of making the Will. Illness and strong medications can impact a person\'s ability to understand the nature and effect of their Will. If there are any doubts as to capacity, this makes the Will vulnerable to challenge on the basis of incapacity. The test for capacity was established in Banks v Goodfellow. At the time of signing the Will, the Will maker must: Understand they are making a Will and the effect of doing so; Understand the extent of their property being dealt with under the Will; and Appreciate moral claims which they ought to give effect to. If a person is making a last minute Will, a doctor’s certificate confirming the Will-maker’s capacity and a lawyer’s file note will minimise the risk of a challenge. Challenges on the Basis of Undue Influence Where a Will makes a drastic departure from previous Wills or the rules of intestacy prior to death, questions of undue influence arise. This refers to a situation where someone has coerced or applied pressure to get a Will-maker to sign a Will. Undue influence affects whether a Will is valid or not. A person alleging undue influence must establish that the alleged influence led to the Will and that the terms of the Will were not the result of the Will-maker’s own free judgment. Preparing your Will Ideally, you should prepare your Will when you are fit and healthy. If you or your loved one are making a last minute Will, we strongly recommend engaging a lawyer to ensure the Will is valid and practical. This will provide certainty for you and your loved ones.

A well drafted Will reduces the time, money and stress of administering your estate when you pass. At Holland Beckett, we take the time to ensure that your Will suits your circumstances, while keeping it simple. Below are our top 5 tips to ensure that your Will is fit for purpose: 1. Choose the right executors and trustees of your Will The executors and trustees (“Trustees”) carry out the terms of your Will. Trustees must be neutral between the beneficiaries (not biased) and make decisions together. We recommend that you pick two Trustees who live in New Zealand, can work well together and are neutral towards your beneficiaries. This will help to make the administration of your estate straightforward and cost effective. Where possible at least one Trustee should be younger than you, as it can complicate matters if your Trustee(s) have already passed away before you. If your Will is complex or you think that there may be a dispute in the family after you die, then you could consider appointing an independent professional as your Trustee. 2. Dealing with personal items When it comes to distributing personal items there are typically two options. The first, is to leave everything to a person or group of people and let them sort it out. The second, is to list what you want to do with each valuable or sentimental item.  If you prefer the second option, rather than listing each item in your Will, you can leave your personal items to your executors to distribute in accordance with any wishes you make known to them. You can then make a list which can be updated at any time, without the hassle and expense of updating your Will. The list should be kept in your lawyer’s deed safe with your Will.  3. Cash or percentage gifts We recommend that you do not leave a cash gift in your Will. This is because, over time, circumstances can change and that gift may become a much larger or much smaller portion of your estate than you intended. Instead consider leaving a percentage of your estate. For example, instead of giving $10,000 to each of your grandchildren you could consider giving a percentage of your estate equally to your grandchildren. This means the gift will increase/decrease proportionately.  4. Understand how your property is owned If you are leaving everything to your partner, check to see if your property is jointly owned. Jointly owned property (property ownership as joint tenants) passes automatically to the survivor, which makes for a quick and hassle free process. Any asset over $15,000 requires an application for probate (Court authority) to deal with that asset.  Check how your insurance policies are owned. If you own the policy, your estate will likely need to apply for probate and the proceeds will be distributed in accordance with the terms of your Will. If the policy is jointly owned, or owned  by someone else, then that person may be able to access the policy straight away.  If in your Will you leave your partner a life interest to live in a property, that property should be owned as tenants in common (where you each own a share). 5. Understand your debts If you want to leave a vehicle or property to a beneficiary that is under finance, consider how the debt will be repaid – does your estate have enough to repay the debt? Are you giving that particular property to the beneficiary on the condition they take on the debt?  Unfortunately, even the most carefully crafted Will can become impractical or even void if your circumstances change. While we try to plan for this with our Will drafting, if you have any major change in circumstance - such as a birth, death, marriage, separation, divorce or a family member moving overseas – you should have your Will reviewed and potentially updated. Holland Beckett can assist with preparing your Will or reviewing an existing one. If you have any queries please reach out to a member of our succession and estates team.

When a person makes a decision in relation to their personal or property rights, they are presumed to have capacity unless there are good reasons to suggest otherwise. A person’s decision does not have to be wise, so long as they understand the nature and consequences of that decision. But, what do legal practitioners have to do when they spot “red flags” which raise questions regarding a person’s capacity to enter into a legal document? Spotting the difference: medical and legal capacity In medical terms, capacity refers to cognitive ability. Medical conditions which may affect a person’s capacity include dementia, brain injury, stroke, schizophrenia, acute depression, alcohol or substance addiction as well as learning disabilities. Enduring Powers of Attorney (“EPOA”) To enter into an EPOA a person must have capacity and be able to: understand the decision’s nature and purpose and appreciate its importance for them; retain the relevant and essential information long enough to make the decision; use or weigh relevant information, considering any consequences of their decision and other possible options, including the option to not make the decision; and communicate their decision, verbally, in writing or some other way. A person’s capacity may come and go. The length of time that a person must retain information relevant to the decision depends on the type of decision being made. While an unwise decision may be considered a “red flag”, the assessment of capacity must take into account the process used by the person to arrive at a decision, rather than looking at the substance of the decision made. An assessment of capacity should also not set the level of understanding too high. It is not necessary for the person to understand every part of the decision. However, the person should be able to explain the benefits and risks associated with each option available to them and state why they have made the decision that they have. Will For a Will to be valid the Will-maker must have testamentary capacity, which is the ability to understand: that they are making a Will and its effect; the extent of the property in their estate; the nature and extent of the potential claims upon the Will-maker, including those who the Will-maker included and those who are excluded from their Wills. Again, there is a presumption of capacity. If there is evidence that the Will-maker lacked capacity, those seeking probate must satisfy the Court that the Will-maker had testamentary capacity on the balance of probabilities. What practitioners need to do if they suspect a person lacks capacity If a legal practitioner sees “red flags” leading them to question whether a person has capacity to enter into a legal document, a medical assessment of capacity should be sought. Legal practitioners should identify why a person’s capacity is being questioned and then a clinician can assess the person’s capacity through an interview process. A person cannot be compelled to undergo a capacity assessment (other than by a Court order). In the case of an outright refusal, a legal practitioner should consider whether the creation of the legal document is in the best interests of the client. Good file notes are a must, all “red flags”, advice and medical assessments should be carefully documented. Particularly where family members have serious concerns or where a decision has serious consequences or risks. Most importantly, file notes should focus on a person’s ability to understand, retain, reason and communicate regarding the decision. It is important to understand that a person may be impaired, yet nonetheless capable of creating a legal document.