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Law Commission Review of Succession Law - Mortlock McCormack Law | Property and Commercial Law | Christchurch, New Zealand
Law Commission Review of Succession Law - Mortlock McCormack Law | Property and Commercial Law | Christchurch, New Zealand
Law Commission Review of Succession Law - Mortlock McCormack Law | Property and Commercial Law | Christchurch, New Zealand
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Law Commission Review of Succession Law

September 2021 Andrew Logan ,  Annie Withington

Te Aka Matua o te Ture | Law Commission Review of Succession Law in New Zealand

Earlier this year the Law Commission released an Issues Paper which explores the current law of succession in New Zealand. It includes a number of recommendations as to what the law should look like in light of its existing limitations and our changing society. The Law Commission expects to release a final report by the end of 2021.

What is succession law?
Succession law governs how property passes from one individual to another on death. It not only determines who receives the deceased’s property, but what particular property they receive and how much of it.
In New Zealand, an individual has the ability to decide how their property is to be dealt with when they die. These decisions are reflected through a person’s will or in other ways such as through trusts and contracting out agreements (pre-nuptial agreements).

Regardless of how a person chooses to leave their estate, the law recognises the rights of certain individuals through the following:

a) the entitlements of the deceased’s surviving partner or spouse to property under the Property (Relationships) Act 1976;
b) the rights of family members to claim provision from the estate under the Family Protection Act 1955 (the FPA) for proper maintenance and support;
c) the rights of individuals who may have provided services or other benefits to the deceased or the estate under the Law Reform (Testamentary Promises) Act 1949 or under the common law; and
d) the rights of family members to receive the deceased’s property if the deceased died intestate (without a will) under the Administration Act 1969.

New Zealand attitudes and values have changed significantly since this legislation was enacted in the mid-20th century. The increasing diversity of our population has introduced more nuanced conceptions of “family”. There has also been an increase in second and subsequent marriages and de facto relationships, blended families and an ageing population, all of which bring its challenges within the current legal framework.

These issues are the crux of the Law Commission’s review, together with exploring ways in which our succession law can better recognise and provide for Māori perspectives.
Key takeaways from the Issues Paper

  • The Law Commission calls for a single “Act” which centralises all succession law in New Zealand.
  • If a surviving partner chooses a relationship property division on the death of their partner, they should also keep whatever gifts are made for them under the will of the deceased. They should then receive a “top-up” from the estate to ensure they receive the full value of their relationship property entitlement.
  • De facto relationships of less than three years should not qualify for a relationship property division on the death of a partner unless they satisfy additional criteria (i.e. where there is a child of the relationship).
  • There should be a time limit where partners have separated prior to death. The survivor should remain eligible to claim under the new Act provided no longer than two years have passed between the partners ceasing to live together in the relationship and the date of death.
  • Under the FPA, the meaning of “support” of a family member is interpreted broadly and includes simply recognition of belonging to the family, even if the family member has no financial need. The Law Commission proposes that the FPA should be more specific about who may make a claim and to what extent. Four options are proposed in this regard:
    1. Provision awards for partners
    2. Provision awards for children under a specific age
    3. Provision awards for disabled children
    4. Recognition awards for children of all ages
  • The Law Commission does not favour options three and four. In its view, these options do not adequately address the challenges faced with the current regime nor reflect contemporary New Zealand attitudes. More detail about the Law Commission’s reservations is detailed on pages 68 – 71 of the Issues Paper.

So what does this all mean for the future of succession law?
There is no guarantee what will happen to our current law, but with the Law Commission’s proposals and recommendations it may be that, under any new Act, adult children will no longer be able to claim against an estate purely for recognition as a child of the deceased – they may need to show something more than this. It may also mean that partners to a de facto relationship will be more limited as to their entitlements to their partner’s estate on death.

Nevertheless, this Issues Paper brings to light the importance of carefully considering how you structure your estate. It is also a good reminder to review your succession plan regularly to ensure it is in line with any changes to the law.
A copy of the Law Commission’s Issues Paper is available here.

If you would like to discuss any aspects of your succession planning or if you think you might have a claim against someone’s estate, please do not hesitate to contact Andrew Logan, Partner (phone 021 222 4646 / andrew@mmlaw.co.nz) or Annie Withington, Solicitor (DDI 03 343 8583 / annie@mmlaw.co.nz).