What happens if you die without a will in place?

Nearly half of New Zealand adults don’t have a will, according to new research. So, what happens to their stuff when they die?

You know what they say, there are only two certainties in life – death and taxes. Yet many New Zealanders don’t have a will in place to prepare for life’s greatest inevitability.

Almost half of New Zealand’s adults (47%) don’t have a will, according to research commissioned by Safewill. It said two-thirds of parents also don’t have a legal guardian appointed for their children.

So, what happens if you die before you’ve got around to making that will?

The legal term for dying without a will in place is intestacy.

The process for how a person’s assets are managed and distributed firstly comes down to the size of their estate.

If the person’s assets are less than $15,000, this is deemed a small estate that next of kin can distribute without involving the courts.

However, if the person owns property or holds assets worth more than $15,000, then their estate needs to be distributed by a court-appointed administrator.

The court will usually appoint a close relative of the deceased to be the administrator.

The order of priority for appointing that administrator is the deceased’s spouse or partner, followed by the deceased’s children, then their parents.

The person with the highest priority can choose to ask the next person on the list to apply to be the administrator instead but that person will need to get consent from everyone else on the same level of priority – their siblings, for example.

Once it’s been decided who will apply, that person then files for what’s called letters of administration.

Among other things, they will need to prove to the court that steps have been taken to find a will, like contacting any lawyers or banks the deceased may have dealt with or contacting major trust companies to see if they hold the person’s will.

This process can take up to six weeks.

Once an administrator is appointed, their role becomes similar to that of an executor of a will. It entails things like filing tax returns, managing any debts and selling property.

The administrator also has the authority to distribute the deceased person’s estate – however this must be done as per rules in the Administration Act 1969.

According to that law, the person’s assets are divvied up as follows if there is no will in place:

Blended families are common these days and they can prove a little more complicated if there is no will in place. Whether or not any stepchildren benefit from a person’s estate can depend on things like their age and whether they were supported financially by the deceased.

Of course, a will is about more than property and assets – it can also designate a legal guardian for any dependent children.

If both parents have died without naming a guardian in their will, the Family Court can appoint one.

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A guardian isn’t necessarily responsible for the child’s day-to-day care though. Instead, they are involved with the big decisions like any major medical care or where the child might live and go to school.

The decision about who’s responsible for the children’s day-to-day care is made after the parents have died - so it pays to let your family members know now who you would like that to be.