Following an individual’s death, a Grant of Administration is required when they have an asset worth over $15,000 in their own individual name. This could be a bank account, life insurance policy, shares, property, or other forms of investments. If the individual has a Will, this will take form of a Grant of Probate, however if you do not have a Will, Letters of Administration will be required. These both are issued through the High Court.
It’s important to note that any assets held jointly with another person including bank accounts, life insurance policies, or shares do not form part of a person’s Estate as they are transferred to the joint owner upon a person’s death.
Accounts such as KiwiSaver however; are always held in a person’s individual name, meaning that if you have more than $15,000 in your KiwiSaver fund, it will be necessary to apply for Probate should you have a Will, or Letters of Administration if you don’t in order for the KiwiSaver investment fund to be accessed.
If you have a Will, you would have appointed an executor or executors that you want to be in charge of your Estate. The executor(s) will apply for a Grant of Probate. Following the granting of this, they will be able to apply to your KiwiSaver provider to have the funds released.
After this, your executor(s) will then distribute your funds in your Estate according to the beneficiaries listed in your Will. In most cases, this is a fairly straightforward process. However, if you do not have a Will, the Administration Act 1969 sets out the priority of who can apply to be the Administrator who will be in charge of your Estate. The administrator(s) will then apply for a grant of Letters of Administration of intestacy. Once this has been granted, then they will then be able to apply to have the provider of your KiwiSaver release the funds.
Following this, the administrator will then distribute the funds in your Estate in accordance with the rules set out in the Administration Act, and you will not have a choice as to who are the beneficiaries of your Estate. The legislation decides this for you.
In some cases, the person who will benefit under the Administration Act is the same person who you may have appointed as beneficiaries under your Will. But in many cases, they may not be the same.
It is paramount that to save a lot of time, cost, and stress for those that you leave behind, that you have a Will in place. Applying for Letters of Administration is a much more complicated, time-consuming, and expensive process than applying for Probate. Be proactive – do your loved ones a favour and be prepared.
Get in contact with us today to discuss your Will.