Deceased Estate: Anything Under $25,000 Should Go To Your Loved One’s Family, Not To Legal Fees – Sign The Petition Now

When someone dies, their Kiwisaver should go to their loved ones, not to lawyers.

Kiwilaw has launched a petition to ask Parliament to allow financial institutions to release funds up to $25,000 without needing High Court paperwork.

Currently, if your loved one has more than $15,000 in any one financial institution when they die, their executor or family must obtain High Court approval before the funds can be released. That approval is called ‘probate’ (if there is a valid will, with executors to do the work) or ‘letters of administration’ (if there is no valid will, or if there is a valid will but no executor).

Unless your loved one made separate financial provision for their funeral expenses, that $15,000 includes the funeral costs, as well as any debts.

The $15,000 limit was set in 2009. Adjusted for inflation, that $15,000 limit is now equivalent to nearly $25,000.

Getting that High Court approval can cost up to $6000 or even more in legal fees, especially if there is no will and there are legal complications. When there is no valid will, legal complications can include your loved one’s permanent home being overseas, or next of kin not speaking English, or the surviving spouse or de facto partner needing a compulsory ‘notice of choice of option’ to choose between the law of inheritance and the law of relationship property.

Even when there is a valid will and the application to the High Court is relatively straight forward, most law firms charge between $1000 and $2000 to get the High Court’s (literal) seal of approval. There is also a High Court fee of $200.

Currently there is a 12-week processing backlog for these applications to the High Court.

Kiwilaw provides a cost-effective, nationwide, online alternative to other law firms, by preparing documents for people to submit on their own behalf to the High Court. However, even Kiwilaw’s fees can exceed $1000 for complicated applications when there is no will.

The law of inheritance is being reviewed. Bigger changes may be coming. However, this small change could and should be made in the meantime. It requires a short, simple, regulation.

The petition is open for signatures for 3 months. It may be accessed here: https://petitions.parliament.nz/079a449c-4e2b-48d7-2ae8-08db3ebbf9f3

Cheryl Simes is Kiwilaw’s sole director and lawyer.

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