Will I or won’t I…? The importance of having an up to date Will

Jim and Lisa had been married for twenty five years.  They had one child, Lucy, who was 18 when Jim died.

It was Jim’s intention that his whole estate would automatically transfer to Lisa.  He passed away without a Will, and owned the following assets at that time:

• The family home owned jointly with Lisa (not as tenants in common);
• Modest joint bank accounts with Lisa;
• A very large life insurance policy; and
• A KiwiSaver superannuation policy;

Ownership of the family home, and the joint bank accounts, were able to be transferred to Lisa by survivorship without much fuss.

However to deal with his life insurance and KiwiSaver policies, Lisa needed to go through the lengthy and complex procedure of applying to the Court to be appointed as Administrator and apply for Letters of Administration.

Once Letters of Administration were finally granted the Administration Act provided that the balance of his estate would be distributed as follows:

• A specified amount (currently $155,000) was to be paid his wife, Lisa.
• 1/3 of the remaining balance was also to be paid to Lisa.
• 2/3 of the remaining balance was to be paid to Lucy.  As Lucy was under 20 years old these funds were to be held in trust for Lucy until she turns 20 years.

Because Jim did not make a will what he expected to happen did not happen. This sort of outcome is far too common.

It is a common misconception that if you die without a will your estate will automatically transfer to your surviving spouse.

Whilst this may be true for assets you own in your joint names, any assets you own in your own name will be dealt with under the Administration Act.

Lisa had the added burden and expense of applying to the Court for Letters of Administration to be granted in what was already a difficult and emotional time for her.