Understanding Inheritance Rights When a Partner Moves In

Questions about inheritance and property rights often arise when a partner moves into a family home. A recent query highlighted concerns about what happens to a house owned by a father if he passes away without a will, leaving behind a partner who has moved in and established residency. According to Justine Wood, a specialist trustee at Public Trust, the situation can lead to complex legal implications.

Understanding Dying Intestate

When someone dies without a will, this is known as “dying intestate.” In such cases, specific legislation governs how the deceased’s estate is distributed. Wood explained that the partner may be entitled to a share of the house under these laws. “Based on the family circumstances you’ve outlined, the partner may be entitled to receive 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,” she stated.

The distribution of assets depends on whether the couple meets the legal criteria for a de facto relationship. If they do, it means the partner has legal rights to certain assets upon the father’s death. The remaining two-thirds of the estate would typically be divided equally among the children.

Managing an estate without a will can be both costly and time-consuming. Wood emphasized that having a will is beneficial for ensuring that the deceased’s wishes are known and helps alleviate the stress on loved ones during an already difficult time.

Criteria for De Facto Relationships

The Administration Act defines a de facto relationship in accordance with the Property (Relationships) Act. A de facto relationship involves a couple who are at least 18 years old, living together as a couple, and not married or in a civil union. Several factors are considered when determining the nature of the relationship. These include the duration of the partnership, the extent of shared residence, financial interdependence, and mutual commitment to a shared life.

Given these complexities, it is advisable for individuals in similar situations to create a will. Even with a will in place, a partner may still have rights under the Property (Relationships) Act. If an individual wishes to ensure that their property is passed directly to their children, they may need to establish a contracting-out agreement with their partner.

For those approaching retirement, questions also arise regarding the management of funds, such as those in KiwiSaver. One common inquiry is whether there are disadvantages to keeping funds in KiwiSaver after reaching retirement age. The general consensus is that there are no significant disadvantages to leaving money in KiwiSaver if it aligns with one’s financial strategy.

However, obtaining advice on investment options is prudent. Depending on the amount in a KiwiSaver account, it can be beneficial to diversify investments across different funds. For instance, some may choose to keep a portion in a conservative fund for immediate needs, while allocating other funds for medium- and long-term growth.

As financial questions continue to arise, RNZ is launching a new podcast titled “No Stupid Questions with Susan Edmunds,” set to premiere next month. This initiative aims to address various inquiries related to money and the economy. Listeners are encouraged to submit questions via written format or voice memos to [email protected].