Lawyer petitions for probate tweak on KiwiSaver funds
A Canterbury law firm specialising in wills and estates is petitioning parliament to enable executors of wills to access funds of up to $25,000 without needing High Court paperwork.
Monday, April 24th 2023, 3:51PM 
7 Comments
When a person dies with $15,000 or more in their KiwiSaver fund, executors have to apply to the High Court for probate (of a valid will) or letters of administration (if there is no will or executor) before then can uplift the funds from any financial institution.
Kiwilaw partner Cheryl Simes says the current probate/letters of administration threshold of $15,000 is too low and executors are having to pay thousands of dollars to access funds, especially from KiwiSaver accounts. She is asking for the threshold, which was set in 2009, to be adjusted for inflation to $25,000.
Simes says the threshold applies to any account held with a financial institution, but KiwiSaver tends to catch people out.
“Generally if people have any wealth they may have it in a family trust or joint account. KiwiSaver accounts are always held in a person’s individual name, and often the balance is not very much but more than $15,000.”
Simes says most lawyers charge more than $2,000 and applicants must also pay a High Court fee of $200. Unless the deceased made separate financial provision for their funeral expenses, that $15,000 includes the funeral costs, as well as any debts.
“Getting High Court approval can cost up to $6000 or more in legal fees, especially if there is no will and there are legal complications. When there is no valid will, legal complications can include your loved one’s permanent home being overseas, or next of kin not speaking English, or the surviving spouse or de facto partner needing a compulsory ‘notice of choice of option’ to choose between the law of inheritance and the law of relationship property.”
Simes says she often deals with cases involving young men who statistically are more likely to die through accident (car or work) or suicide. In one case the balance of the KiwiSaver account was $15,013.
She says she is asking for an inflation adjustment to the threshold rather than for the level to be raised as that would mean a policy change.
The Administration [Prescribed Amount] Regulations 2009 which prescribes the actual figure for the purposes of several sections of the Administration Act says financial institutions can’t release anything above the prescribed amount without probate or letter of administration.
“The law of inheritance is being reviewed and big changes are coming but in the meantime this small change could and should be made. It involves a short, simple, regulation.”
“When someone dies, their Kiwisaver should go to their loved ones, not to lawyers.”
| « Fisher Funds to jettison fees | Employers including KiwiSaver as part of pay packets instead of on top » |
Special Offers
Comments from our readers
The slowness in professionals handling distribution of estates probably is affected more by the executors general 6 months delay to ensure she/he/they have no personal liability for errors, and a possible 12 month hold to see whether any relationship property or family protection claims raise their ugly heads.
if there are too many rules, it may end up only one party benefiting from it all.
Sign In to add your comment
|
|
Printable version |
|
Email to a friend |
https://petitions.parliament.nz/079a449c-4e2b-48d7-2ae8-08db3ebbf9f3