Understanding Inheritance Rights When Dying Without a Will

A common question surrounding inheritance arises when a partner moves into a property owned by someone else, particularly in the absence of a will. This situation was recently discussed in a public inquiry about what happens to a house if the owner dies without leaving a will. Justine Wood, a specialist trustee at Public Trust, provided insights into the legal implications.

When a person dies intestate, meaning without a will, specific laws govern the distribution of their estate. This can lead to complications, especially if there is a surviving partner. According to Wood, the partner may have rights to a share of the estate. In this case, she stated, “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.” The actual amount depends on whether the couple qualifies as being in a de facto relationship at the time of death.

A de facto relationship is defined under the Property (Relationships) Act. For a relationship to qualify, both individuals must be at least 18 years old and living together as a couple without being married or in a civil union. Several factors are taken into account, including the duration of the relationship, the nature of their shared living arrangement, financial interdependence, and mutual commitment.

If the deceased has children, they will inherit the remaining two-thirds of the estate after the partner’s share. This could lead to disputes and confusion, which is why estate planning is crucial. Wood emphasizes that having a will can significantly ease the burden on family members during a difficult time. “Administering an estate when there is no will can be costly and take longer to sort out,” she pointed out.

In addition, even with a will, a partner may still have rights under the Property (Relationships) Act. To ensure that the property is distributed according to one’s wishes, it may be necessary for the partner to sign a contracting-out agreement.

Another related query pertains to managing retirement savings. Questions arose about the advantages of maintaining funds in KiwiSaver after reaching retirement age. According to experts, there are no disadvantages to keeping money in KiwiSaver if it aligns with one’s financial strategy. It is advisable to consult with financial advisors regarding investment options within KiwiSaver, as diversifying funds can be beneficial.

Individuals nearing retirement might consider allocating their funds across various investment types. For instance, some funds could be kept in conservative or cash options for immediate needs, while others may be placed in balanced or growth funds for long-term gains.

Overall, understanding the legal landscape of inheritance and financial management is essential for ensuring that one’s wishes are honored and that loved ones are not left in a complicated situation. For more inquiries, listeners can engage with the upcoming podcast, No Stupid Questions with Susan Edmunds, set to launch next month.