Succession Law changes considered by Parliament

The Government has recently provided its initial response to the New Zealand Law Commission (“the Commission”)’s recommendations to reform succession laws in New Zealand.

Late last year, the Commission completed its comprehensive review of the current piecemeal laws which determine what happens to a person’s property when they die. The Commission has recommended significant changes which would bring New Zealand’s legal framework in line with the evolution of modern relationships and family make ups, as well as properly reflecting te ao Māori perspectives.

The Commission recommends that a new piece of legislation, the “Inheritance (Claims Against Estates) Act” should be brought in to replace the current laws which are currently spread across multiple pieces of legislation to make the law much easier to understand.

The Commission recommends several reforms to modernise succession law including:

• Giving the deceased’s surviving partner the right to choose to divide their property under relationship property laws, including family chattels, while also allowing them to receive any gifts given to them by the deceased under their will, with the value of the gift being included in the surviving partner’s total relationship property share (a “top-up” approach);

• Limiting the ability of adults to challenge a will where they are dissatisfied what has been left to them. The Commission has recommended removing the ability for parents of the deceased to challenge a will. Initially the Commission also suggested that the rights of adult children should be removed as well, however public opinion was divided on this. Instead, the Commission has proposed two alternative options for change: the first would continue to enable independent adult children and grandchildren to make a claim against a will, while the second would restrict claims to children under the age of 25 and adult children with disabilities.

• Modernising the laws around what happens where a person dies without having made a will (known as dying “intestate”). The Commission’s recommendations would see that the deceased’s surviving partner would inherit a proportion of the deceased’s estate rather than an amount prescribed by statute, and inherit the family chattels. The Commission also recommends that where the deceased is survived by a partner but no children, the surviving partner should receive the entirety of the deceased’s estate, rather than a portion of the estate going to the deceased’s parents.

• The Commission also recommends new rules apply where there are blended families, by setting out how much a partner and children from current or past relationships should inherit when a person dies without a will.

• Allowing partners to contract out of succession laws, just as they can contract out of the default sharing provisions under relationship property law (except in regards to rights held by minor children or disabled adult children). This would mean partners could contract out of the ability for each other to challenge a will.

• Giving the Courts new powers to recover property that did not form part of the estate on death to satisfy entitlements or claims, such as where property has been intentionally moved in order to defeat a claim or which has been accrued by a joint tenant of that property which would have had the effect of defeating an entitlement or claim.

The Government has acknowledged that much of the law in this area is outdated, with some being more than 70 years old, and that change is needed in order to reflect modern relationships, families, and Te Ao Māori.

The Ministry of Justice will now consider the Commission’s recommendations,alongside its recommendation to reform relationship property laws (which the Commission reviewed in 2019)  as well as any additional policy work needed to modernise the law in these areas. The Government has indicated that given the scope of the proposed changes, it is expected that it will take several years until changes are implemented.

If you are looking to do your own estate planning, we can provide you with clear and helpful legal guidance through the estate planning process.

We can also advise you if you believe you have not received an entitlement from a person’s will that you should have done. We can advise you whether you have the ability to challenge the will and help you contest it if you do; or alternatively, if you have been served with an application to contest a claim against an estate, we can help you defend the claim.

For tailored legal advice, get in touch with Ruth or Jaesen.