In 2019 the Government instructed the Law Commission to review inheritance law in New Zealand which is currently governed by a combination of acts including the Family Protection Act of 1955, the Property (Relationships) Act of 1976 and the Administration Act of 1969.
The thinking behind the review is to simplify the law into one relevant piece of legislation.
Some of the major changes recommended include:
- Under the current law, parents are considered to have a “moral-duty” to provide for their children no matter their age. The Courts have quantified this duty to be in the vicinity of 10-15% depending on the individual circumstances. The Law Commission recommendation would be to do away with this duty for children over the age of 25. If you are over the age of 25 and you don’t feel your parents Will provides sufficiently for you, you cannot contest the Will. If a child is disabled or under the age of 25, they would still be eligible to make a claim.
- As society has changed, so has the conception of the “family unit”. The Law Commission recommends that step-children be given the right to make a claim under the law where they had no standing to do so previously. This extension would include those who have been in a whāngai relationship.
- The Commission has recommended a wider view be taken of blended families. Especially in the case of re-married parents who own property as joint tenants and on the death of one parent, the property automatically passes to the survivor hence leaving the children of the deceased parent without access to their parents asset.
- The intended law will also give the Courts greater power to look into assets that fall outside the estate. For example, if there is clear evidence that someone intended to use a trust to hide their assets then the Court could allow a claim against the Trust.
Given the complexity of the changes and the current legal framework, any changes are not expected to be implemented for a number of years.
Should you have any queries about estate planning or your current Will, please do not hesitate to contact one of our team.