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Life After Death – A Brief Look at Estate Administrartion

Life After Death – A Brief Look at Estate Administrartion

Provided by Dairy Women's Network and Hamertons Lawyers Limited

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To quote Benjamin Franklin, “there are only two things certain in life, death and taxes”.

We spend our lives growing our wealth and building our “empire”. But what happens to it when we die? We receive phone calls daily asking, “my loved one passed away, now what”.

In an ideal world, our loved one passed away having left a will. A will appoints executor/s, whose responsibility is to administer the will-makers estate. The will also specifies how the estate is to be distributed and to which beneficiaries. In some cases, the wider family are aware that a will has been prepared and which law firm holds the original in their Deeds Room. In this case, the executor/s will need to contact the law firm to obtain a copy.

If your loved one passes away and you’re not sure if a will was ever drafted, it is a good idea to engage a solicitor who can assist in liaising with other firms to try and locate a will. This could be in the form of writing letters to local law firms and/or posting notices through the New Zealand Law Society communications which reach most law firms around New Zealand. Once a will has been located, the same process mentioned above applies. The executor/s can liaise with the law firm and choose to uplift the will or engage the incumbent firm to assist in the administration of the estate.

Now that we have located a will, we need to identify all our loved one’s assets and liabilities. It’s important to note that an estate includes all assets ranging from bank accounts and investments, through to property and shares, through to personal possessions and household chattels. The more information you can provide to the lawyer, the more accurate their advice will be. Once the bank is notified of the account holders’ death, the accounts in deceased’s sole name will be frozen. It’s important that the wider family are aware of this as arrangements will need to be made to ensure any bills are maintained until the funds in the accounts can be uplifted.

One important rule of law that needs to be discussed is the rule of survivorship. If a bank account, investment or property is held jointly, then the share of the deceased transfers to the surviving owner. Assets held jointly will transfer by survivorship and do not form part of our loved one’s estate.

Once we have identified all the assets, we need to determine if any one of those assets held by an institute (like a bank or insurer) is worth more than $15,000.00.
If so, the executors will need to apply to the High Court for Probate. This is the process where we prove our loved one has passed away and the High Court grants consent for the executor/s to administer the estate. You will not be able to claim or close any assets/policies worth more than $15,000.00 without Probate. The lawyer engaged to administer the estate will draft the application to the court and assist the executor/s to complete their affidavit.

Once the High Court grants probate, then the executors and the lawyer begin the process of calling in any assets and repaying any debts. If your loved one owned a home, it is at this stage the house can be listed for sale.

Once all the assets have been claimed and the debts have been repaid, we can look towards completing a final tax return (if required) and distributing the estate to the beneficiaries. It is advisable to hold estate assets for 6 months following probate. The reason for this is if a claim is made against the estate by a family member or creditor, the executor/s can be held personally liable for payment of the claim if they distribute before this time.

But what happens if my loved one died without a will?

If this is the case, our loved one is deemed to have died intestate. An application will need to be made to the High Court for Letters of Administration on Intestacy. This is an application to the High Court to appoint an administrator who will be responsible for administering the estate. Not everyone is entitled to apply for Letters of Administration as there is a specific hierarchy of applicants who can apply (based on beneficial interest in the estate). The People who inherit are set out in section 77 of the Administration Act 1969. The lawyer engaged to administer the estate will be able to work through the application process with you. Letters of administration can be costly as the application process is more involved than probate. Once Letters of Administration have been granted, the administrator and the estate’s lawyer can begin calling in assets and distributing, much the same as if probate had been granted.

Like with most things in law, there can be exceptions to intestacy law. It is important that you seek legal advice from the outset to ensure that you undertake the best process for your specific circumstances.

Contact Hamertons Lawyers Limited by clicking HERE.

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