In 2021, the Law Commission released an Issues Paper exploring New Zealand’s current succession laws, seeking recommendations from the general public as to what aspects of succession law need to be reformed in order to keep up with social change.
The Law Commission’s Final Report containing the proposals and recommendations for reform was released in November 2021. A copy of the report is available here.
New Zealand’s social landscape has changed drastically since the drafting of the existing legislation many generations ago. The increasing diversity of family relationships in New Zealand; the recognition of nga tikanga Maori and an ageing population all create need for law reform.
The Commission’s recommendations, if accepted, will replace many current laws including the division of relationship property on death; which family members are entitled to an estate when someone dies without a Will (intestacy); who can make a claim for greater provision from an estate (family protection); and testamentary promises.
One area for reform is the Family Protection Act which currently allows family members of a deceased person to challenge the amount left to them under a deceased person’s Will or on an intestacy on the grounds that the provision (if any) is inadequate for their proper maintenance and support. The Courts currently apply a test of whether the deceased has failed in the “moral duty” they owe the family member for support.
The Law Commission has put forward two alternative, and quite different, options for reform of a deceased’s child’s or grandchild’s entitlement to claim for further provision from an estate. The first would allow children and grandchildren of all ages to make a claim and give the Court discretion to grant an award where the deceased has unjustly failed to recognise a child or grandchild or to make provision for a child or grandchild who is in financial need. The factors to be taken into account by the Court are similar to those considered under the current law.
The second option would only permit the deceased’s children under 25 years of age or who are disabled to make a claim where they can show need. This would be a more radical departure from the status quo.
There are also changes proposed which would enable property that has been diverted out of a person’s estate prior to death – for instance by transfer to a trust or joint ownership – to be clawed back into the estate.
There is no certainty as to what will happen with our current succession law, but the Law Commission’s Report will help bring New Zealand’s succession law into a more contemporary setting. If you would like to discuss any aspects of your succession planning, please do not hesitate to contact us at enquiries@bchlaw.co.nz.
By Hannah Cull, Solicitor and Sarah Tustin, Consultant
The information contained in this article is provided for informational purposes only and should not be construed as legal advice on any subject matter
