Trusts & Estates

Good planning protects the people you care about and gives you confidence about what happens next, for your family, your home and your business.

How we can help

• Wills and enduring powers of attorney
• Establishing and reviewing family trusts
• Trustee duties and trust deed updates
• Estate administration and probate
• Relationship property agreements
• Advice on claims against estates

Why a will matters more than most people think

If you die without a valid will, the law decides who inherits, and the result may be very different from what you would have chosen. Under the Administration Act 1969, the intestacy rules divide your estate among your partner, children and other relatives in fixed proportions. An unmarried partner, a step-child, a friend or a charity gets nothing automatically.

A will also does more than distribute assets. It names the people who will carry out your wishes, appoints guardians for young children, and can set up trusts to protect a beneficiary.

What a will does not cover

• Jointly owned property. Where the family home is owned as joint tenants, it passes to the survivor automatically, whatever the will says.
• Trust assets. Property that belongs to a trust is not part of your estate.
• KiwiSaver and insurance. These can pass according to the nominated beneficiary, or the rules of the scheme.

A situation we see often

A man remarries and leaves his old will unchanged, which left everything to his children from his first marriage. He assumes his new wife will be "looked after". In fact, marriage revoked the will unless it was made in contemplation of the marriage, and his estate is now dealt with under intestacy rules that give his children and his wife shares he never considered.

The legal point: under the Wills Act 2007, marriage or entering a civil union generally revokes an earlier will. Life events require a new will, not an assumption.

When your will should be reviewed

A will is a snapshot. It needs revisiting when:

• you marry, separate, divorce or enter a new relationship;
• you have children or grandchildren, or a child turns 18;
• you buy or sell property, start a business or move overseas;
• a beneficiary or executor dies, or their circumstances change; or
• you set up a trust, or the law changes.

Enduring powers of attorney: planning for incapacity

A will only operates after death. An enduring power of attorney (EPA) allows someone you trust to act if you are no longer able to make decisions yourself, because of illness, an accident or dementia. There are two kinds, under the Protection of Personal and Property Rights Act 1988:

• Property EPA. Covers financial and property decisions: paying bills, managing investments and, if needed, selling the house. It can take effect immediately or only on loss of capacity.
• Personal care and welfare EPA. Covers decisions about health care and where you live. It operates only once a medical practitioner certifies that you lack capacity.

Without an EPA, your family may need to apply to the Family Court for a property order or the appointment of a welfare guardian. That process is slower, more expensive and more public, and the court chooses the decision-maker.

A situation we see often

An elderly mother develops dementia. Her daughters want to sell her home to pay for rest-home care, but the house is in their mother's sole name and she no longer has the capacity to sign. She never made an EPA.

The legal point: the family must apply to the court, which can take months and adds cost and stress at the worst time. An EPA signed earlier would have avoided it.

Family trusts: what they do, and what they do not

A trust holds assets for the benefit of others. Trustees legally own the assets, beneficiaries benefit from them, and the trust deed sets the rules. Families set up trusts for many reasons: succession planning, protecting assets from future claims, providing for children or vulnerable family members and managing the family home.

Trustee duties under the Trusts Act 2019

Since 2021, trustees have mandatory duties that cannot be removed by the deed, including to know the terms of the trust, act in accordance with it, act honestly and in good faith and for the benefit of the beneficiaries, and exercise powers for a proper purpose. Default duties include acting with reasonable care and skill, considering the exercise of powers and not profiting from the trust. Trustees must keep core documents and, in most cases, give beneficiaries basic information about the trust.

Trusts are not a magic shield

A properly run trust can provide meaningful protection, but it is not impenetrable. Courts have power to look at the reality of how a trust has been used. Transfers into a trust can be challenged if they were made to defeat creditors or relationship property claims, and assets in a trust may still be counted in some situations, especially where the settlor kept effective control. The protection depends on when the trust was established, how it is run and why it was created.

A situation we see often

A couple placed their home in a family trust 20 years ago. Since then, the trust deed has not been reviewed, trustee meetings have never been held and decisions are made informally by the settlor alone.

The legal point: a trust run as if it did not exist invites challenge. A review brings the deed, the trustees and the records up to date with the Trusts Act 2019 and restores the structure's integrity.

Trusts, rest-home care and gifting

Government subsidies for residential care are asset-tested, and transfers to a trust or to family can be treated as gifts, which affects eligibility. If you are considering the long-term care of a parent, or your own, plan well ahead and take advice before transferring assets.

Relationship property and estate planning

Property (Relationships) Act 1976 rules affect what you can leave in your will. When a partner dies, the survivor generally has a choice: to take their share of the relationship property under the Act, or to take what the will provides. The choice must be made within strict time limits after probate is granted, and the right answer depends on the numbers. Agreements between partners (contracting-out agreements) can change the default rules, but they must be in writing, signed by both and each party must have independent legal advice with the lawyer certifying the agreement.

Blended families and second relationships

When a person with children from an earlier relationship forms a new partnership, competing expectations are common. Careful planning can protect a surviving partner while ensuring that the children inherit. Common solutions include:

• a will that leaves the family home to a trust so the partner can live there for life, with the home passing to the children later;
• a relationship property agreement that records what each person brought into the relationship; and
• mutual wills or contracts, which are binding but inflexible, and need to be carefully drafted.

Claims against an estate

New Zealand law does not allow complete freedom to leave an estate to anyone. Certain people can challenge a will:

• Family Protection Act 1955. A spouse or partner, children, step-children, grandchildren and, in some cases, parents may claim if the will fails to make adequate provision for their proper maintenance and support.
• Law Reform (Testamentary Promises) Act 1949. A person who provided work or services to the deceased on the promise of a reward in the will may claim if the promise was not kept.
• Property (Relationships) Act 1976. A surviving partner can claim a share of relationship property.

Time limits are strict, and an executor who distributes the estate too early can face personal liability. If you are planning to leave someone out of your will, or you have been left out, take advice promptly.

A situation we see often

A parent leaves the whole estate to one child, who had cared for them in later years, and nothing to the other two. The excluded children, who have modest means, bring a Family Protection Act claim.

The legal point: a court looks at moral duty and the claimant's needs. A parent who wishes to treat children unequally should record the reasons, and consider alternatives that reduce the risk of a successful claim.

Administering an estate

When someone dies, the executor named in the will is responsible for the estate. The steps are:

1. locate the will and arrange the funeral;
2. apply to the High Court for probate (if there is a will) or letters of administration (if there is not), when required by banks or the land registry;
3. identify and value assets and debts, and notify institutions;
4. pay debts, taxes and expenses, and file any final tax returns;
5. distribute to beneficiaries once the time for claims has passed and the executor is satisfied it is safe to do so.

Executors carry real legal responsibility. Mistakes, for example distributing too early, ignoring a claim or missing a tax liability, can be personal. We guide executors through the process step by step and relieve the burden at a difficult time.

A situation we see often

A mother passes away leaving a house in her sole name and a will naming her son as executor. The son wants to sell quickly to divide the proceeds with his sisters. A sister, however, disputes the will and says her mother lacked capacity when she signed.

The legal point: the executor should not distribute until the dispute is resolved. Early legal advice protects the executor and keeps the estate intact.

Estates with overseas connections

New Zealanders with property in Australia, the United Kingdom or elsewhere, and migrants with assets in their home country, need to plan for more than one legal system. Each country may have its own rules on forced heirship, formality and tax. We coordinate with overseas advisers and recommend separate wills where appropriate.

Planning for business owners and farmers

If you own a business or a rural property, succession planning is as important as writing a will. We advise on how shares or land are held, how family members who work in the business are treated compared with those who do not, and how to avoid a forced sale at the worst moment.

Questions we are often asked

Do I need a will if I have a trust?

Yes. A trust deals with trust assets only. Your will deals with everything in your own name, appoints guardians and often ties in with your trust arrangements.

Can I write my own will?

You can, but a will must meet formal requirements to be valid, including being signed in the presence of two witnesses who are not beneficiaries. Homemade wills commonly cause disputes over unclear wording.

How long does probate take?

Straightforward applications can be granted within weeks, but complex estates, disputes or overseas assets take longer.

Who should be my executor or attorney?

Someone trustworthy, organised and willing. Many people appoint a family member and a professional together. We can explain the pros and cons.