If a person dies leaving behind a valid will but it does not properly dispose of all their assets, then the remaining assets will be distributed intestate under the Administration Act 1969 (“Act”).
This could happen if the deceased forgets to deal with an asset in his or her will or if a beneficiary no longer exists when the deceased dies. The estate will then be divided among the surviving spouse, children, parents, and other next of kin, depending on the circumstances.
For example, Mr A decides to leave his assets to his family trust to look after the next generation. A few years after signing his will Mr A and the other trustees of the family trust decide to wind up the trust. Unfortunately, Mr A forgets to update his will which still has the family trust as the beneficiary of his estate – but it no longer exists. Mr A’s estate will now be distributed pursuant to the intestacy laws under the Act.
In many situations this may not be a problem as the people who end up inheriting under the Act may be the same as if the family trust inherited the estate. However, sometimes this may not be the case and the estate is distributed in a way that the deceased never intended.
This is why it is good practice to regularly check your will to make sure it properly disposes of your assets. If you are uncertain about the distribution of your assets upon your death or need to update your will, you can contact Kemp Barristers & Solicitors at info@kempsolicitors.co.nz or 09 412 6000.