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Trust Law Update: Recommended Law Changes – Inheritance and Wills

There has been a huge amount of publicity in the second half of 2023 regarding recommended changes to the law around inheritance and wills.

The law commission has made a number of recommendations to parliament, the key change recommendations being:

  • No ability for children to challenge how their parents leave their estate, unless the child is under the age of 25, giving absolute testamentary freedom to those with children over that age limit. Presently any child can make a claim against a parent’s will if they think they have not been treated fairly. The current law recognises a “moral duty” to provide at least a portion (in most cases 10-15%) of your estate to each child.

  • The alternate recommendation is that any child, regardless of age, will be able to contest a will based on financial need.

  • Stepchildren under the age of 25 will have an absolute right to contest a stepparent’s will. The current law only allows dependent stepchildren to make a claim.

  • The law around what happens if you die without a will would be changed so that a surviving partner would take the whole estate (presently the estate would be divided unequally between surviving partner and children). If the children were from a previous relationship, they would share equally with the surviving partner.

  • A Court may look at assets transferred to a trust or held jointly with another party when deciding what award to make to a claiming party. This means that the Court could “bust” into a trust if it thought that assets had been transferred to defeat rights under the suggested new inheritance laws.

Future considerations

At this stage, these are only recommendations. Parliament can decide which, if any, of the recommendations it will adopt. It is important to remember that the first law commission report and recommendations on trust law occurred in 2002 and the new law wasn’t passed until 2019, to take into effect in January 2021, so these things do take time.

However, the key both now and in the future, will be to ensure that you have an appropriate will which considers your personal circumstances and that of your family. The importance of good advice and proper estate planning cannot be overemphasised.

If this has raised questions around your current will or family situation, get in touch with our Trust Team.
tammy@davenportslaw.co.nz | 09 883 4420


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