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SEPTEMBER 2016

The Risks of Having NO Will

Who has the entitlement to administer a deceased’s estate and the entitlement to the assets?

A recent High Court decision highlighted the problems when a person in a de facto relationship dies without a Will.

Background

  • N (the deceased) gave instructions for a Will but never signed it.
  • N had adult children.
  • N and L met in 2004 and lived in a de-facto relationship from 2005.
  • In late 2008 L began living and working in Australia whilst N remained in New Zealand.
  • In late 2012 N died without a Will, necessitating an Application to the High Court for a grant of Letters of Administration.

What should have happened?

  • L, as the deceased’s de facto partner, should have applied to the High Court for a grant of Letters of Administration.
  • L, as the deceased’s de facto partner, would have been entitled, pursuant to the Administration Act, to receive the first $155,000 together with one-third of the balance whilst N’s adult children would have been entitled to two-thirds of the balance.

What actually happened?

  • N’s daughter (J) applied to the High Court for a grant of Letters of Administration.
  • She stated to the Court, by affidavit, that “at the time of my mother’s death my mother … was not living in a de facto relationship”.
  • Letters of Administration were granted to J and subsequently the nett assets of the estate were distributed to N’s adult children with nothing for L.

The Court decision

The Court held that the de facto relationship between N and L continued up until N’s death with:

  • L providing financial support to N whilst in Australia;
  • L visiting N in New Zealand regularly;
    N attempting to move to Australia in early 2012 (but with entry refused by the Australian authorities);
  • J making a sworn witness statement to the Police shortly after her mother’s death that L “is my mum’s long term partner and they have been together for over five years. He currently lives in Australia also but gives mum the financial & emotional support she needs. He has been one of the best things that has happened to mum”.

The Court further held that J should not have applied for Letters of Administration and should not have distributed the assets of the estate in the way she did. Unfortunately, the assets have since been lost as a result of poor investments by N’s adult children. Consequently there were no assets for the Court to be able to award to L, notwithstanding his entitlement. The issue of a potential order for costs against J and her ability to pay were not determined at the hearing.

The moral of the story

If N had signed her Will none of this saga would have occurred.