How much can a disinherited child expect?
The Family Protection Act 1955 allows children to bring claims against the estate of a deceased parent on the basis that their parent did not adequately provide for their ‘proper maintenance and support’. Exactly what constitutes ‘proper maintenance and support’ is the subject of considerable litigation, as well as extensive commentary in the media.
Since a trio of Court of Appeal decisions in the early 2000s, a general understanding has emerged that awards under the family protection legislation can be quantified by referring to a percentage of the relevant estate. It has long been said that a financially-stable adult child might expect to receive between 10%–20% of the estate of their deceased parent, depending on a number of factors including the size of the estate and the position of others under the will or those people who are entitled to make a claim. In many cases, the 10%–20% threshold has become an informal benchmark when assessing the position of a financially-stable adult child making a claim against a modest, but not insignificant, estate. Continue reading “Claims on an estate”
Comes into force early 2021
The Trusts Act 2019 will come into effect on 30 January 2021. Much of the Act updates or restates existing law. However, there are a number of changes about which trustees and people with trusts should be aware.
The Act contains ‘mandatory’ and ‘default’ duties for trustees. Mandatory duties cannot be modified or excluded by the trust deed so all trustees will have to observe them. Mandatory duties are: Continue reading “Trusts Act 2019”
Increasing numbers of elderly New Zealanders are going into residential care and seeking the government’s residential care subsidy. The legislation governing the subsidy is the Residential Care and Disability Support Services Act 2018, and the assessment procedure is overseen by the Ministry of Social Development (MSD).
To receive the subsidy, applicants must satisfy three MSD criteria:
Continue reading “Residential care subsidy thresholds, trusts and gifting”
Grandparents often want to give some financial assistance to their grandchildren and great-grandchildren. There can be a number of good reasons for making specific provision for grandchildren in your will or through a family trust. The traditional will-drafting practice is for parents to provide for each other and then when both of them have died, they provide for their children, on the assumption that their children will then in turn acquire assets and provide for grandchildren and great-grandchildren.
First, there is often, in practice, no such provision for grandchildren and great-grandchildren by will-makers. In many cases, the will-maker’s children receive their inheritance and either spend it or provide for their partners or spouses. Little, or sometimes nothing, trickles down to grandchildren and great-grandchildren.
Continue reading “Grandparent wills”
The new Trusts Act 2019 will come into effect on 30 January 2021. Much of the Act updates or restates law that exists already, either in statute or in case law. There are, however, a number of changes about which trustees and settlors should be aware.
The Act contains ‘mandatory’ and ‘default’ duties for trustees…
Continue reading “Trusts Act 2019”
Making a good choice
Having an executor of your will is like having a manager of your affairs (your estate) after your death. Your executor is named in your will; it is his or her role to carry out the terms of your will. Many people have more than one executor; it spreads the load and it’s also good to have another executor to discuss things with.
Who do you choose?
You can choose anyone to be your executor, but they do need some special qualities. You should consider:
Age: you want them to have the energy, ability and maturity to deal with your affairs. Sometimes this can be a fine balance – if you have someone older there’s a risk they could die before you or could become incapable of fulfilling their duties. However, someone younger may not have sufficient life experience to cope with the role.
Temperament: dealing with an estate can be quite emotional. You want your executors to be calm, steady, decisive and with loads of common sense.
Continue reading “The executor of your will”
For better, for worse?
The law governing the division of property when a relationship ends is, after more than 40 years, set to change following the Law Commission’s comprehensive review of the Property (Relationships) Act 1976 (the PRA).
The Law Commission has identified changes that it believes should be made to ensure the regime better reflects the reasonable expectations of New Zealanders. We set out some of the proposals that may be relevant to you or your family.
The family home
Under the current law, in a marriage, civil union or de facto relationship of more than three years, the family home is automatically considered to be relationship property and subject to equal sharing. Under the changes proposed, the family home will not necessarily be shared 50/50, particularly if one partner owned it before the start of the relationship. In that situation, it is proposed that only the increase in value would be subject to equal sharing.
Continue reading “Property (Relationships) Act 1976 changes proposed”
What the future may hold for separating couples with a trust
When a marriage, civil union or de facto relationship breaks down, the couple will usually divide their property according to the Property (Relationships) Act 1976 (the PRA). However, these two people often hold property in a trust rather than personally.
The PRA has limited remedies to access property which has been put in a trust, and this can result in unfairness when a couple separates if there are no assets that they own personally.
The Law Commission has undertaken a review of the PRA and proposed that the legislation be changed to make it easier to access trust property when a couple separates.
Continue reading “Accessing the assets of a trust”
The upside (and downside) of downsizing
New Zealand’s ageing population has created a boom for retirement villages, with record numbers being developed. For many looking to retire or slow down, retirement village living is attractive – and it’s not hard to see why. A new apartment or cottage in a secure, well-maintained environment, offering a lock-up-and-leave lifestyle, and providing resort-like facilities such as cafes, gyms, pools, bowling greens, libraries and men’s sheds can be very appealing.
Many clients tell us how happy they are to have made the move, some even say they wish they had done it sooner, but retirement village living is not for everyone. It’s important to think carefully about what this move means for you – both financially, and in terms of your current and future needs.
Continue reading “Retirement village life”
It has been estimated that there are between 300,000-500,000 trusts in this country. Trusts have been established for many different reasons, including estate planning, creditor protection, to ensure access to rest home subsidies, tax benefits or for protection from relationship property claims.
When the reason for a having a trust is no longer valid (there’s more on this on our article Do I still need a trust? here), it is important to bring it to an end in the most appropriate way bearing in mind the powers in the trust deed and the needs of all the beneficiaries.
This article explores the two most common ways that trusts can be brought to an end – bringing forward the date of distribution (the trust’s expiry date) and distributing all the trust assets to beneficiaries.
Continue reading “How do I bring my trust to an end?”