The rights of family members to challenge a will and the rights of a partner in the event of death are among the areas the Law Commission is considering in its examination of inheritance law.
Inheritance law, which determines who inherits a person’s property upon death, currently allows people to gift property by will, generally as they wish, the commission said.
However, the will may be challenged by some people, including close family. In the case of a person who died without a will, the law indicates how the estate should be distributed among family members.
On Thursday, the commission released a discussion paper and consultation website, outlining options for reform and seeking public comment by June 10.
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“Succession law affects all New Zealanders, but much of the key legislation was written in the mid-20th century,” said lead review commissioner Helen McQueen.
“Aotearoa New Zealand has changed significantly since then, affecting the relationships we enter into and what we think family means. Attitudes and values in society have changed, and we believe some of these laws are now outdated.
Maori had potentially different perspectives on succession, and involving Maori in consultation was a priority, the commission said.
Currently, the law providing for claims against estates is found in several statutes, including the Property (Relations) Act 1976 as well as common law and equity.
Rather, the commission felt that what was needed was a single, comprehensive statutory regime, one statute setting out the law governing the property rights of relationships, claims for family benefits and claims for contribution.
Eighty per cent of respondents to the commission’s estate survey agreed or strongly agreed that a person should be allowed to bequeath family members outside of their will. Among Maori it was 82% and among Europeans it was 83%.
Most respondents also agreed that family members excluded from a will should be allowed to challenge the will for a share of the estate, particularly in the case of infants or disabled children of the deceased.
About three-quarters of respondents agreed that a surviving partner should be entitled to the share of relationship assets they would otherwise have received if the couple had separated during their lifetime.
The commission proposed that a surviving partner continue to be entitled to the same ownership of the estate that they would get if the couple had separated, rather than the deceased partner dying.
The commission was of the view that a common-law relationship of less than three years should generally not be eligible for a division of the property of the relationship upon the death of a partner.
The commission also proposed that certain family members could claim from the estate of a deceased relative to support them if they were not properly provided for in the deceased’s will or in an intestacy when not there was no will.
The preferred option was for the deceased’s surviving partner and children under a certain age – either 18, 20 or 25 – to be entitled to the “family provision” from the estate.
Two other options were raised: should disabled adult children also be eligible for Child Benefit and should all children be eligible for limited compensation to recognize the parent-child relationship.
Individuals who contributed significant benefits to the deceased or their estate, but received no compensation, should be able to make a claim against the estate.
The commission also proposed changes to the rules that apply to the distribution of estates ab intestate, when there is no will. It is estimated that around half of New Zealanders aged 18 and over do not have a will.
Where there is a partner but no descendants, the partner should get the entire estate, with the parents no longer entitled to a share, the commission suggested.
Right now, your partner gets the personal effects, the first $155,000, and two-thirds of the rest. Your parents get the other third. Your partner gets everything if your parents are no longer alive.
The parents have been eligible claimants since 1943, but there have been very few cases involving a claimant parent, the commission said.
The commission proposed that if there is no partner, the descendants should continue to share the estate.
When there is a surviving partner and descendants, the commission has suggested three options for the division of the estate.
After consultation, the commission will finalize its reform recommendations in a report to the Government, expected at the end of 2021.