How to make an inheritance selection when a party in a relationship dies...

When one party in a relationship dies, the surviving partner can select to inherit as follows:

• Option A – Make a claim under the Property Relationship Act, for a half share of the relationship property. 
• Option B – Inherit under a Will or the laws of intestacy.

Read more about what these options mean.

How to make a selection:

• The choice must be made in writing.
• The notice of selection must be in the prescribed form.
• The notice must be accompanied by a certificate signed by a lawyer, stating the lawyer has explained the effect and implications of the notice to the person making the choice.
• The notice must be lodged with the administrator of the deceased’s estate, or if administration was not granted in New Zealand then in the registry of the High Court.
• Minors can give notice as if they were of full age.

Where a party has to lodge their choice with the High Court, there are also several other people who must receive copies of the notice (depending on the type of property involved) .

There are time limits for making a selection:

The election of Option A or Option B must be made within the prescribed time limits set out in law:

• If the deceased’s estate is small (currently defined as less than $15,000) the choice must be made before the later of:
  • 6 months after the date of death of the deceased;
  • Or if a grant of administration is made in New Zealand no later than 6 months after the grant of administration.
• In all other cases the choice of option A or option B must be made no later than 6 months following the grant of administration in New Zealand.

The Court has the power to extend the time for making a choice, but the application for extension of time must be made before the final distribution of the estate.

Can a selection be reversed?

Once a between Option A and Option B has been made, (or no choice has been made and Option B applies by default) it cannot be changed.  The Court can, however, in specific circumstances, set aside a choice (or if they failed to make a choice at all) only if it is satisfied that any of the following apply:

• The choice was not freely made;
• The party who made the choice did not fully understand the effect and implications of the choice;
• The party who made the choice has subsequently become aware of new relevant information in relation to the choice;
• Since the choice of option was made, another person has made a Testamentary Promises and/or a Family Protection claim against the deceased’s estate; and
• Having considered all the circumstances the Court is satisfied it would be unjust to enforce the choice of option.

The Court must have regard to the following considerations:

• The circumstances in which the choice was made;
• The length of time since the choice was made; and
• Any other relevant matters.

No choice can be set aside if final distribution of the estate has been made.

If you have concerns about how your relationship property will be divided upon your or your partner’s death or if you have questions about how a contracting out agreement or separation agreement may affect this, it pays to speak to an experienced professional who can give you advice specific to your circumstances.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.