Navigating Estate Rights: What Happens to a House Without a Will?

When a person passes away without a will, the distribution of their estate becomes subject to specific laws. This situation raises vital questions for families, particularly regarding property rights. A recent inquiry has brought attention to the complexities of estate management when a partner and children are involved.

Justine Wood, a specialist trustee at Public Trust, provided insights into a scenario where a father, who owns a house, has a long-term partner living with him. The partner has established her residence by placing utility accounts in her name. If the father dies without a will, the question arises: will the partner inherit the house, or will it go to the children?

According to Wood, when someone dies intestate—meaning without a will—the Administration Act defines how the estate will be divided. In this case, the partner may indeed be entitled to a portion of the estate. “The partner may be entitled to receive the personal chattels, such as vehicles, furniture, and jewellery, the first $155,000 of the estate, and a third share of the remainder of the estate,” Wood explained.

The distribution largely hinges on whether the couple meets the legal criteria for a de facto relationship at the time of death. The remaining two-thirds of the estate would be equally distributed among the children. The legal definition of a de facto relationship, as per the Property (Relationships) Act, includes couples living together who are not married or in a civil union, provided they meet certain criteria such as duration of the relationship and financial interdependence.

Given these complexities, Wood emphasizes the importance of drafting a will. Without one, the administration of an estate can become costly and time-consuming, placing additional stress on grieving loved ones. A will clarifies the deceased’s intentions regarding their estate, making it easier for family members to navigate the process.

In addition to estate planning, individuals may wonder about financial strategies for retirement. Another question posed to Wood involved the implications of maintaining funds in a KiwiSaver account past retirement age. She noted that there is no inherent disadvantage to keeping money in KiwiSaver after reaching retirement, as it might be the most beneficial option depending on personal circumstances.

It is advisable for retirees to seek guidance on their investment options within KiwiSaver. Depending on the total amount in the account, it may be prudent to allocate funds across various types of investments—some in a conservative or cash fund for immediate needs, others in a balanced fund for medium-term goals, and a portion in a growth fund for long-term growth. Although growth funds can fluctuate, they typically offer higher returns, potentially extending the longevity of retirement savings.

In conclusion, situations involving estate rights and financial planning require careful consideration. Understanding legal definitions and financial options can significantly affect the outcomes for families navigating these challenges. As families face these questions, expert advice proves invaluable in ensuring that their decisions align with their long-term goals.